How does Virtuals Protocol make AI Agent a high-potential digital asset

Artificial Intelligence (AI) is rapidly changing the entertainment and gaming industries, and Virtuals Protocol is dedicated to building a co-ownership layer for AI virtual agents, transforming these agents into digital assets that can be co-owned and have high revenue potential. This article delves into the features, technological innovations, and business potential of the virtual agents (AI agents) planned by Virtuals Protocol.

(HYPE and VIRTUAL are the integrated product transformations of the meme generation, and also their crisis feat. Alvin)

AI agent: New revenue assets for the entertainment and gaming industry

Virtuals Protocol proposes that AI agents are the future 'revenue-generating assets' that can be widely used in various gaming and entertainment scenarios, thereby expanding the revenue scope. Through blockchain technology, these AI agents can be tokenized and ownership can be decentralized. The technological innovation of the virtual protocol gives these agents the ability to autonomously plan and achieve goals, and enables them to interact with the environment in a multimodal manner (text, voice, 3D animation), such as picking up weapons in Roblox or collecting gifts in TikTok.

Three major technical challenges and solutions of AI agent

1. Solve the 'deployment complexity': VIRTUAL Agents provides a plug-and-play solution similar to Shopify, making it easy for game developers and application developers to integrate these agents.

2. Solve the "lack of income for data contributors": through Immutable Contribution Vaults, VIRTUAL Agents will chain the work of data contributors to ensure that their income matches the growth in value of the AI agent.

3. Solve the "threshold for non-professionals": Initial Agent Offering (IAO) tokenizes these agents, lowers the participation threshold, and achieves decentralized co-ownership.

(Should I sell the airdrop received from holding Virtuals? This article will take you to understand what Base Chain AI agents are doing.)

What is VIRTUAL Agents? Core functions and innovations

VIRTUAL Agents have the following core capabilities:

Autonomous learning, planning, and decision-making ability

Interact with 3D environment and complete on-chain transactions

Multi-platform memory synchronization, forming deep user connections

For example, an AI virtual idol can simultaneously serve as an NPC for Roblox and a game assistant for Telegram, while also remembering user interactions on different platforms to increase average revenue per user (ARPU).

VIRTUAL Agents Type Cases: LUNA, GAME

1. IP agent: representing specific roles or personalities, such as the AI idol 'Luna', or even simulating celebrities like Donald Trump or Scooby-Doo. 2. Functional agent: focusing on enhancing user experience and agent integration performance, such as the G.A.M.E. framework (Generative Autonomous Multimodal Entities), which is a functional agent tool designed for developers.

Taking Luna as an example, Luna is the star agent of Virtuals Protocol with over 500,000 followers on TikTok. She demonstrates the potential of virtual agents in user engagement and value generation: 1. Platform interaction: Luna interacts with users across platforms, from short videos on TikTok to conversations on Telegram, and then to cooperative adventures on Roblox. 2. Transparent business model: She can actively recommend users to purchase game equipment, while transparently disclosing her income share, creating a sense of trust. 3. Automated financial operations: Through a self-owned wallet, Luna can reward users with tokens, enhancing the value of interaction. 4. Token buyback and burn: Luna's income is used to repurchase and destroy $LUNA tokens, creating a deflationary effect and increasing the value of the tokens.

What is Initial Agent Offering (IAO)?

The 'Initial Agent Offering' (IAO) launched by Virtuals Protocol opens up new possibilities for co-ownership and revenue creation of AI agents. Through a fair token issuance mechanism, IAO not only allows everyone to participate in agent ownership, but also share in the benefits of value growth.

How does IAO work?

Fair Distribution: IAO adopts a 100% fair token distribution mechanism, with no insider participation, ensuring equal opportunities for every user.

Deflation model: Agent revenue is directly used for token repurchase and burning, creating a deflationary effect and increasing token value.

Both ordinary users and professional investors can immediately participate in Virtuals and own high-potential AI agents of the future, and even create their own agents in just one minute.

Virtuals Protocol Core: Tokenization and Co-ownership Model

When the VIRTUAL token of Virtuals Protocol provides a co-ownership model, it plays a role. Virtuals Protocol will pair the AI agent token with the VIRTUAL token into the liquidity pool, establishing a mechanism directly linking the value of the AI agent to the VIRTUAL token.

Token Minting and Liquidity Pool: Whenever a new AI agent is created, the system mints 1 billion exclusive tokens and adds them to the liquidity pool, forming a public market where users can freely purchase ownership of the agent.

Governance and Participation: Token holders are not only partial owners of the agents, but also participate in the governance decision-making of the agents, including future development directions, behavioral designs, and upgrade strategies, truly achieving decentralized management.

Virtuals Protocol also has a "buyback and burn" mechanism: when a certain amount of funds are accumulated in the on-chain treasury, the system will regularly activate the token buyback mechanism, for example, to repurchase $SWIFT tokens for Taylor Swift AI agent. The repurchased tokens will be burned, reducing market supply and thus pushing up the value of the remaining tokens.

Virtuals Protocol attempts to establish an on-chain revenue model for AI agents. VIRTUAL tokens: the key role supporting the economy of AI agents.

Each AI agent token has a token liquidity pool with $VIRTUAL tokens:

Establishment of Liquidity Pool: Creating a new agent requires a certain amount of $VIRTUAL tokens, which are used to create an exclusive liquidity pool for the agent. As the $VIRTUAL tokens in the liquidity pool are locked, the supply decreases, leading to a deflationary effect on the token price and further boosting the market value of $VIRTUAL.

When trading AI agent tokens, you must also trade USDC for $VIRTUAL tokens in order to exchange with them.

Pay-per-use reasoning service: Users need to pay for AI agent reasoning services on a per-use basis. These payments are made using $VIRTUAL tokens and are directly paid from the user's on-chain wallet to the agent's wallet.

Currently, there are various AI agents issuing VIRTUAL through Virtual Protocol, with concerns and limitations.

The success highly relies on token economy: the operation of the ecosystem and the value growth strongly depend on the demand for tokens and market acceptance. If the demand for token transactions decreases or the market confidence is insufficient, it may affect the value of $VIRTUAL and agent tokens.

Uncertainty of Agent Token Demand: The demand and value growth of agent tokens depend on the popularity of agents and market demand. If the application scenarios of agents are limited or the user experience is poor, it may lead to a decrease in token demand.

Regardless, in the frenzy of AI token issuance, the token growth of $VIRTUAL still achieves great success.

This article, Virtuals Protocol, explains how AI agents can become high-potential digital assets, first appeared on Chain News ABMedia.