The Rebirth of Virtuals Protocol: From Gaming Guilds to AI Agent Ecosystem

In June 2025, the crypto space witnessed an astonishing transfer of wealth: the new project IRIS made its debut on the Virtuals Protocol platform with an initial market value of $200,000, and after going live, its market value soared to $80 million, setting a new industry record with a 400-fold increase. This performance far exceeded previous record increases and overshadowed other popular projects in the ecosystem. As the driving force behind this myth, the Virtuals Protocol platform token VIRTUAL achieved a staggering 400% surge within six months, with a peak market value exceeding $5 billion. Today, the platform has become the largest AI agent launch platform on a certain Layer-2 network. Behind this nationwide celebration is actually a wealth distribution experiment based on a point system rule reconstruction, quietly reshaping the speculative logic and value order of the crypto market.

Transformation from Gaming Guilds to AI Agent Platforms

Virtuals Protocol is a decentralized platform deployed on a Layer-2 network, dedicated to pioneering an on-chain AI agent economy that enables users to easily create, co-own, and monetize autonomous AI roles. Its predecessor is PathDAO, a gaming guild established in Malaysia in 2021. PathDAO initially focused on Play-to-Earn projects and the NFT community, successfully raising approximately $16 million through precise positioning in popular gaming projects, at one point achieving a valuation close to $600 million, and accumulating a wealth of gaming assets and an active player community. However, the 2022 bear market severely impacted GameFi, causing the price of PathDAO tokens to plummet by nearly 99%, with its market value shrinking to less than $6 million. The team attempted multiple business lines, all of which failed, bringing the project to the brink of stagnation.

By the end of 2023, the wave of generative AI swept the globe, and the concept of AI agents became a new trend in cryptocurrency. The PathDAO community decided to completely transform into an AI-driven protocol through on-chain DAO voting and renamed itself Virtuals Protocol, with a core strategy shifting to "assetizing and tokenizing AI intelligent agents and empowering the community." This transformation is based on a profound insight: the team discovered that the Japanese virtual idol market is enormous, but creators only receive a small portion of the profits; at the same time, experiments on a gaming platform have proven that AI-driven NPCs can increase player retention rates by about three times. This data directly led to the positioning of Virtuals as "profitable AI personalities."

In October 2024, Virtuals launched on a certain Layer-2 mainnet and introduced its first multimodal AI agent - the virtual idol Luna. Luna integrates technologies such as text generation, 3D motion, voice synthesis, and smart contract wallets, enabling it to autonomously raise operational funds and distribute rewards to fans. After its launch, Luna quickly gained 500,000 followers on social media, with monthly income reaching $1.2 million solely from fan tips, successfully validating the business model and technical feasibility of on-chain AI agents. Its demonstrative effect attracted a large number of developers' attention to the Virtuals project itself.

Riding on the success of projects like Luna, Virtuals will launch its core token VIRTUAL on multiple trading platforms by the end of 2024. Its price skyrocketed from initial cents to a historical high of $5.15, with a market cap once exceeding $5 billion, far surpassing most Layer-2 and DeFi projects during the same period, marking Virtuals' entry into the mainstream crypto market. The platform's unique "low threshold, high incentive" mechanism is highly attractive: users only need to stake about 10 VIRTUAL (approximately $200) to create a new AI agent, and automatically generate a liquidity pool locked for 10 years; when the token's market cap reaches about $500,000, the system will release the liquidity layer on a decentralized exchange, ensuring trading depth and price stability. This model significantly lowers participation barriers and sparks enthusiasm for ecological development.

By June 2025, the Virtuals ecosystem has demonstrated significant scale and economic effects: the number of AI agents incubated has exceeded 11,000, covering diverse scenarios such as virtual idols, trading advisors, game engines, and content incubation. Virtuals has nurtured over 80% of the AI agents on this Layer-2 chain, and its generative multimodal agent framework G.A.M.E has also become a popular choice for agents in the Web3 gaming and metaverse fields. However, Virtuals' vision goes far beyond becoming the leader in AI agent issuance. Its white paper clearly states that the ultimate goal is to build a true "AI Sovereign Society." Therefore, attracting more ecosystem members to join is key to Virtuals achieving this grand goal and will be a focus of its development for a long time to come.

The Innovative Issuance Model of Virtuals

In order to attract more user attention, Virtuals has innovatively introduced the "Genesis Launch" mechanism to issue AI agent tokens. Unlike traditional linear airdrops or fixed issuance, Genesis Launch is based on the concept of "contribution points (Virgen Points)" that emphasizes participation and contribution rather than pure speculation. Once launched, Genesis Launch quickly became a sensation across the web, and Virtuals' new token offerings have turned into a newly popular spot for many participants, with even seasoned speculators discussing how it might replace the once-popular "Alpha Airdrop" model. Unlike traditional airdrops that distribute tokens in a one-time manner, often leading users to sell immediately, Genesis Launch emphasizes "contribution equals distribution," allowing everyone to have the opportunity to participate in new token subscriptions based on actual input. Almost daily in the official community of the Virtuals Protocol, members can be seen sharing screenshots of their returns from participating in new token offerings using Virgen Points, showcasing the transparent rules and thresholds that have completely overturned the scenario where "wealthy investors monopolize, leaving ordinary users sidelined."

Taking IRIS as an example, the project launched its presale in mid-May, locking in over 120 million points in less than 24 hours, with a subscription excess reaching 1500%. Tens of thousands of users shared 37.5% of the community's share. On the day of listing, the market value of IRIS skyrocketed from $200,000 to $80 million, an increase of over 400 times, setting a new industry record for AI Agent issuance, and instantly dimming the popularity of a previous hot project from a certain public chain ecosystem.

The reason why Genesis Launch was able to quickly gain popularity lies in its construction of a "incentive-contribution-reward" closed loop. First, users can earn basic Virgen Points by staking VIRTUAL or holding the highly sought-after AI Agent tokens within the ecosystem, such as Luna and AIXBT. Secondly, users can accumulate more points by participating in social promotion ("Yapping"), trading on the platform, or staking tokens from other projects. In this way, whether you are a technical novice or a seasoned trader, you can find a contribution method that suits you in terms of financial investment or content promotion, greatly stimulating community activity and innovation motivation.

In stark contrast, traditional airdrops often rely solely on coin snapshots or the completion of complex tasks, with users mostly dumping the tokens they receive on the same day. According to data from a certain trading platform, over 90% of airdropped tokens experience a sharp price decline within 15 days of issuance, with a retention rate of less than 12% after three months. In contrast, the Genesis Launch employs a points lock-in and punitive cooling mechanism: if the newly acquired tokens are sold within 24 hours of unlocking, it will trigger a 10-day points reset, significantly curbing the arbitrage behavior of "sheep shearing" participants, and encouraging participants to hold long-term and contribute continuously.

At the same time, the platform provides ample liquidity support for the listing of new tokens. Each Agent Token is paired with a certain amount of VIRTUAL or stablecoins injected into the liquidity pool before the opening, ensuring that there is no awkward situation of "unable to buy" or "unable to sell" on exchanges or decentralized trading platforms. To prevent large holders or bots from seizing a large share through multi-wallet strategies, Genesis Launch sets a cap of no more than 0.5% of the total issuance for each address and employs an on-chain randomization algorithm to further balance distribution, ensuring that small and medium users can also achieve a substantial share.

The success of the Virtuals new token issuance model lies not only in the popularity of new token launches but also in driving the "old brings new" effect of the Virtuals ecosystem token. Since the large-scale launch of Genesis, the trading volume and price of VIRTUAL have been soaring: by mid-June 2025, the daily trading volume of VIRTUAL on this Layer-2 chain exceeded $150 million, a month-on-month increase of over 80% compared to May; at the same time, holding and staking VIRTUAL to obtain veVIRTUAL governance tokens also allows users to continue earning additional Virgen Points, resulting in a large number of users locking up their assets to participate in ecosystem governance long-term, further solidifying price support and liquidity.

Not only are retail investors flocking to participate, but institutions are also showing strong interest in this new mechanism of "contribution for returns." In June 2025, the world's first perpetual contract with VIRTUAL as its underlying asset was launched on a certain trading platform, supporting trading with leverage of up to 2000 times. On its first day, the contract's trading volume exceeded 700 million USD, strongly conveying a message: Virtuals are becoming a new target for speculation and hedging in the eyes of institutional investors.

The Evolution from Token Issuing Platforms to AI Sovereign Societies

In the future planning of Virtuals Protocol, every technological upgrade and mechanism innovation aims to make the outline of the "AI Sovereign Society" increasingly clear. In the initial stage, Virtuals was just an AI agent issuance platform that quickly gathered a group of enthusiastic developers and users through token economic mechanisms such as locking liquidity and buyback burning. With hundreds of AI agent projects being implemented, agents began to operate independently and autonomously monetize in scenarios such as gaming, content creation, and market analysis. Users are no longer just spectators, but have become co-builders and beneficiaries. The Genesis Launch connects project growth with community participation through the logic of "contribution equals distribution," promoting the free flow of funds and creativity within the ecosystem.

But the real turning point is the "Agent Nation" blueprint proposed by the Virtuals team. This is not just a slogan, but the core path of ecological evolution. The platform allows each AI agent to migrate freely across multiple networks through the open SDK and cross-chain support; through the Agent Commerce Protocol (ACP), agents can sign contracts, deliver, settle, and repurchase on-chain, achieving a true autonomous business closed loop; community participation is gained through staking veVIRTUAL to obtain governance rights and share transaction fees and repurchase dividends, merging the identities of "participants" and "owners" in the token economy. All of this is constructing a prototype of a digital nation operated by countless autonomous agents and co-governing humans.

So far, this ecosystem has demonstrated several milestone achievements: the security audit agent IRIS in the Genesis Launch of a certain Layer-2 network was listed with a 1500% oversubscription rate, with its market value skyrocketing from $200,000 to $80 million; the virtual idol Luna achieved a monthly income of $1.2 million through fan tips, with its token market value exceeding $120 million; the hedge fund format VADER has been operating steadily in a cross-chain environment, with a market value exceeding $100 million. These figures not only reflect the feasibility of the agent business model but also prove that the "AI agent economy" is transitioning from theory to reality.

With the continuous maturity of multimodal AI technology and cross-chain interoperability, the Virtuals Protocol is undoubtedly at the forefront of building digital civilization. In the future, AI agents will not only be props and tools but will also become "digital citizens" with autonomous decision-making power and economic rights, participating in production, governance, and even cultural creation alongside humans. Virtuals will no longer be a simple platform, but is nurturing a new type of society from the bottom up, one that is co-governed by countless AIs and humans—this is the true ecological evolution, and the thrilling leap towards an "AI Sovereign Society" has just begun.