The AI Agent market continues to heat up, with Virtual and AI16Z competing for industry dominance.

In the fourth quarter of 2024, the AI Agent market is experiencing explosive growth, and this trend continues into early 2025. By early January 2025, the total market value of AI Agents has surpassed $16.9 billion, an increase of 22.7% compared to the previous week.

In this popular track, two major platforms stand out: Virtuals Protocol and AI16Z. Virtuals Protocol is the main AI Agent issuance platform on the Base chain, with its platform token VIRTUAL having a market capitalization exceeding $5 billion, ranking among the top 40 cryptocurrencies globally. Meanwhile, in the Solana ecosystem, AI16Z serves as a venture capital institution managing AI Agents, with a market capitalization also surpassing $2.5 billion. These two projects have become barometers for observing the development of the AI Agent industry.

Development History

Virtuals Protocol: From Gaming Guilds to AI Agent Issuance Platform

Virtuals Protocol was founded by a Malaysian team in 2021, initially focusing on trading business. Subsequently, they adapted to market trends and established the gaming guild PathDAO with a funding of $16 million at a valuation of $600 million.

During the period from 2022 to 2023, the gaming guild market cooled down, and the team transformed into an entrepreneurial studio, attempting multiple project directions. Although these attempts were unsuccessful, they made the team realize the potential of AI technology. In 2023, the team proposed a complete transformation into the AI field, gaining 90% member support.

In 2024, they explored the AI gaming field on the Base chain and launched the platform in February. Although they did not achieve the expected success initially, the team made several breakthroughs in the AI field, including the world's first Roblox AI RPG and no-game-engine AI games. Additionally, their virtual host Luna, launched on short video platforms, attracts about 5,000 fans daily with stable income. Ultimately, the success of the GOAT project provided an excellent development opportunity for the Virtuals Protocol.

AI16Z: From Web 2.0 AI to Web 3.0 AI

The founder of ai16z, Shaw, comes from San Francisco and was previously a game developer before shifting to the AI field, focusing on the development of AI Agent technology. Before founding ai16z, he participated in several AI-related projects and has also dabbled in Web3 and 3D cyberspace.

The turning point of the project stems from an idea called "AI version degen Spartan". This AI's performance on social media has subverted people's stereotypes of AI, with its sharp and personalized remarks sparking widespread discussion.

Through connections within the industry, Shaw conceived the idea of creating AI investors, aiming to build a fully autonomous, trustworthy investment system that serves the community. The ai16z project set a fundraising goal of 4,420 SOL at its launch, which was sold out in just 20 minutes, demonstrating the strong market interest in this innovative model.

Core Product

Virtuals Protocol: AI16Z's iOS

Virtuals Protocol serves as a platform for issuing AI Agents, functioning similarly to certain existing platforms, but with the unique aspect of using the platform token VIRTUAL as the trading pair. The more AI Agents created on the platform, the more VIRTUAL is directly empowered, with buying and selling AI Agent tokens consuming at least 1% of VIRTUAL.

The platform establishes common standards for its AI Agent tokens, emphasizing precise planning, utilizing the AI Agent framework GAME to achieve autonomous operation, process inputs, and generate responses, while learning from past interactions.

In terms of products, Virtuals Protocol provides relevant development tools for its AI Agents to ensure that its tokens do not deviate too far from the parent protocol, making the overall ecosystem more complete. Its model is somewhat similar to Apple's iOS.

AI16Z & ELIZA: The Android of the AI World

AI16Z is a fund autonomously managed by AI, employing a hybrid strategy that includes AI-operated functions and community interaction mechanisms. Community members can provide trading suggestions, and successfully helping the AI Agent to profit can earn them more trust.

ELIZA is an open-source framework for AI Agents that allows developers to freely build, experiment, and launch AI Agents, emphasizing decentralization, collaboration, and innovation. Its core features include a role profile system, action system, providers, and evaluators.

ELIZA has autonomous trading capabilities, ensuring operational security through a trust engine and trust market. Its external system promotes the growth of the developer ecosystem, creating a virtuous cycle. However, in terms of token economics, ELIZA has not tightly bound its architecture to the ecological protocol, allowing anyone to develop using the ELIZA framework, resulting in a decentralized distribution of power.

Concept Project Overview

| VIRTUALS Ecosystem | Type | Market Cap | AI16Z/Eliza Ecosystem | Type | Market Cap | |-------------|-------|------|-----------------|----------|------| | VIRTUAL | Protocol Token | 4.34B| AI16Z | Fund | 2.29B| | AIXBT | Analyst | 594M | ELIZA | Framework | 120M | | GAME | Framework | 253M | DegenAI | Simulated KOL | 80M | | VADER | Fund | 113M | SPORE | Self-replication | 36M | | FREYA | Game | 21M | SNAI | Cloud Server | 83M | | TAOCAT | Self-Evolution | 50M | VAPOR | Launch Pad | 91M |

Catalysts Driving Coin Prices

Virtuals Protocol

The business model of Virtuals Protocol is clear, with products closely tied to the token price. The estimated increase in token price can be observed by monitoring the trading volume of ecosystem tokens and the number of tokens issued. Data shows that the issuance of platform tokens peaked on November 30, 2024, and has since declined, with a current daily issuance of around 100-200 tokens.

Virtuals Protocol does not pursue the growth of the number of issued tokens, but hopes to incubate high-quality projects. The key to driving the rise of the VIRTUAL token lies in whether it can continuously incubate excellent AI Agent projects.

Data shows that there are 138 tokens in the Virtuals Protocol ecosystem, with 8 having a market capitalization of over 100 million USD. The overall ecosystem occupies 33.3% of the AI Agent market share, making it the largest ecosystem. Whether more tokens can break through a market capitalization of 100 million USD in the future, and whether the overall ecosystem can maintain its market share, will be key points to observe in the development of the Virtuals Protocol.

AI16Z/Eliza

The overall ecosystem of AI16Z is relatively weak, and projects developed using the Eliza architecture cannot directly bring value back to AI16Z/Eliza. This is also one of the reasons why AI16Z's current market value is only half of Virtual.

AI16Z adopts an open strategy, allowing emerging AI Agent projects to use the ElizaOS architecture as a promotional point. If endorsed by founder Shaw, it can further enhance the project's credibility. AI16Z increases brand trust by having more and more projects use ElizaOS, with a strategic model similar to "surrounding the city from the countryside."

The future market value of AI16Z will depend on the depth, speed, and breadth of collaboration with other protocols. Recently, AI16Z has partnered with some well-known framework protocols (such as ARC and FXN), and we look forward to more strong collaborations in the future.