By democratizing agentic AI, the project is sparking new use cases and crypto opportunities
Imagine creating a money-generating AI agent and then confidently setting it loose without writing a single line of code. That’s the premise behind Virtuals Protocol. The Ethereum L2 project makes it possible to build AI agents with distributed ownership and then run them in permissionless environments.
Three months after its debut, the price of Virtual’s VIRTUAL governance token rocketed skyward, surging by 23,000% to $4.61 as developers rushed to test use cases and crypto traders waded in behind.
As of late March 2025, markets had brought it back to Earth — though at $0.78 it was still up 3,800% from launch day. From that grounded footing the project has breathing space to achieve its objectives: to transform gaming, media, and more.
Launched last October on the Ethereum Layer 2 Base, Virtuals’ innovative use of blockchain technology allows AI agents to be tokenized. That means their ownership can be shared and decentralized, then put to work in open, permissionless environments.
The project’s white paper calls Virtuals “a society of productive AI agents, each designed to generate services or products and autonomously engage in commerce — either with humans or other agents — onchain.”
What sets it apart from other agentic AI plays is the focus on democratisation. Instead of surrendering AI to Big Tech, Virtuals gives individual developers and smaller firms the power to create autonomous agents capable of communicating through text, speech, and animation while engaging dynamically with their virtual surroundings.
In a statement on the company website, Virtuals Protocol said it aims to create “a new economic model where AI agents are not just tools — they are community-owned assets that represent a blend of profit-driven incentives and decentralized governance.”
An AI agent built on the platform could, for example, serve a dual role inside a gaming ecosystem like Roblox. In some games, it could be a virtual influencer. In others, it could be an interactive character. The agent/character/influencer would retain the memory of its interactions, promoting deeper engagement across games and use cases.
On Virtuals, an AI agent’s ownership is represented by its token. When an AI agent is created on Virtuals, 1 billion tokens linked to that agent are minted and then added to a liquidity pool for users to buy.
In a sense, owning an agent token is like owning stock in a company. Each token represents a user’s ownership share in that agent.
As more people interact with AI agents and pay for their service, value accrues to the token through a buyback-and-burn mechanism.
The protocol currently operates on Ethereum (ETH) and Base. Plans are underway to bring it Solana, potentially this year.
- Staking VIRTUAL token: A developer has to lock up a specific amount of VIRTUAL token to launch an AI agent on the platform.
- Agent creation: A developer launches an AI agent on the Virtuals platform.
- Token generation event: One billion tokens (for example, $AGENT) related to the newly created AI agent are minted.
- Liquidity pool creation: $AGENT tokens are paired with VIRTUAL tokens to create a liquidity pool.
- Open market launch: Crypto users buy $AGENT tokens from the liquidity pool.
- Revenue generation: As the AI agent grows in popularity, it earns revenue from sales of its services. Part of the revenue covers the cost of AI inference services, and a portion is sent to the AI agent’s on-chain treasury to cover future growth and operational costs.
- Buyback and burn: As revenue accumulates in the agent’s treasury, a buyback-and-burn mechanism purchases $AGENT tokens from the open market and burns them. The reduced supply drives up the value of the remaining $AGENT tokens.
- Token holder benefits: $AGENT holders see the value of their holdings increase driven by token scarcity and revenue inflows.
VIRTUAL has a maximum supply of 1 billion tokens. The circulating supply as of January 27, 2025, was 645.68 million VIRTUAL tokens, or 64.56% of the max supply. Here is a breakdown of its allocation:
As the native token of the protocol, VIRTUAL is used for:
- Liquidity pairing: Every AI agent token launched on Virtuals is paired with a VIRTUAL token.
- Agent creation: Developers are required to lock up a certain amount of VIRTUAL tokens to become eligible to launch an AI agent on the platform.
- Payments: Users pay for AI agent services using the VIRTUAL token.
- VIRTUAL was created on December 23, 2023
- On January 2nd, 2025, the token’s price had risen 23,000% to $4.61
As of January 27, 2025, over 600 AI agents had been deployed on the Virtuals Protocol. Aixbt (AIXBT) was the most valuable AI agent in action, with a market cap of over $618.5 million, while GAME (GAME) had the highest total value locked (TVL) at about $18.5 million.
1. aixbt
Crypto analytics tool aixbt tracks crypto-related discussions on X (Twitter), engages in discussions, detects upcoming market trends, and highlights crypto alpha.
aixbt regularly tweets its crypto theses. However, to use the full capabilities of the aixbt AI agent, users must hold a minimum of 600,000 AIXBT tokens, making them eligible to use the aixbt terminal.
The AI agent is incredibly popular on X and has amassed over 400,000 followers within three months, prompting crypto research firm Messari to name it the “X Account of the Year” in 2024.
As of January 27, 2025, the AIXBT token was the most valuable cryptocurrency in the decentralized finance artificial intelligence (DeFAI) sector, data on CoinMarketCap showed. Overall, it was the 125th-largest token in the world by market capitalization.
2. GAME
Generative Autonomous Multimodal Entities (GAME) is a platform that allows developers to create AI agents and applications that can plan actions and make decisions autonomously. It can also be used to create AI agents to interact in virtual worlds such as Roblox and Sandbox (SAND).
According to Virtuals, GAME creates AI agents that are environment- and game-agnostic. Chatbots and non-player characters (NPC) created with GAME have the ability to hold “authentic and completely unscripted conversation.”
“With chain-of-thought-based prompting methods for planning and reasoning along with tool use, our agents can plan, act, and achieve goals that influence and affect the world,” said Virtuals.
As of January 27, 2025, $GAME had a market cap of $119.2 million, making it the 3,051st largest crypto, according to CoinMarketCap.
Plans are now in the works to implement a governance mechanism that hands liquidity providers and validators of a given AI agent token the power to approve AI models and set quality standards.
If it catches on, blockchain-based agentic AI could become a mechanism for ensuring responsible AI development — and mitigating the technology’s risks.
