The Rise of Virtuals Protocol: A Glamorous Transformation from a Blockchain Game Project to an AI Agent Issuance Platform

In June 2025, the crypto market welcomed a remarkable wealth feast: the new project IRIS debuted with an initial market value of $200,000 through the Genesis Launch platform of Virtuals Protocol, and after its launch, the market value skyrocketed to $80 million, setting an astonishing record of a 400-fold increase. This performance not only greatly surpassed previous records of increases but also overshadowed other popular projects in the ecosystem. As the driving force behind this miracle, the token of the Virtuals Protocol platform, VIRTUAL, achieved a 400% growth within six months, with a market value peaking at over $5 billion. Currently, the platform has firmly established itself as the largest AI Agent launch platform on a certain Layer-2 network. Behind this nationwide celebration is, in fact, an experiment in wealth distribution based on brand new scoring rules - it is quietly reshaping the speculative logic and value order of the crypto market.

01. Nirvana Rebirth: From Gaming Guild to AI Intelligent Agent Issuance Platform

Virtuals Protocol (abbreviated as Virtuals) is a decentralized platform deployed on a Layer-2 network, dedicated to pioneering an on-chain AI agent economy, allowing users to conveniently 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 NFT communities, successfully raising approximately $16 million with a peak valuation nearing $600 million, accumulating rich gaming assets and an active player community through precise positioning in popular gaming projects. However, the bear market in 2022 severely impacted GameFi, causing PathDAO's token price to plummet by nearly 99%, with its market value shrinking to less than $6 million. The team's attempts at various business lines including social apps, NFT fashion, and music platforms all failed, leaving the project on the brink of stagnation.

By the end of 2023, the wave of generative AI swept across 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 (with a support rate of up to 90%) and was renamed Virtuals Protocol, shifting its core strategy to "assetizing, tokenizing AI agents and empowering the community." This transformation is based on profound insights: the team discovered that the Japanese virtual idol market exceeds 100 billion yen, but creators receive less than 20% of the profits; at the same time, experiments on a certain platform have proven that AI-driven NPCs can increase player retention rates by about three times. These two pieces of data directly gave rise to the positioning of Virtuals as "profitable AI personalities."

In October 2024, Virtuals launched its first multimodal AI agent - the virtual idol Luna on a certain Layer-2 network mainnet. Luna integrates text generation, 3D motion, voice synthesis, and ERC-6551 smart contract wallet technologies, enabling it to independently raise operational funds and distribute rewards to fans. After its launch, Luna quickly gained 500,000 followers on social media platforms, with a monthly income reaching $1.2 million solely from fan tips, successfully validating the business model and technical feasibility of on-chain AI agents. Its demonstration effect attracted a large number of developers to pay attention to the Virtuals project itself.

Riding on the success of projects like Luna, Virtuals launched its core token VIRTUAL on multiple trading platforms and Layer-2 networks at the end of 2024. Its price skyrocketed from a few cents to a historical high of $5.15, with a market capitalization exceeding $5 billion at one point, 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 value reaches about $500,000, the system will release the liquidity layer on the DEX, ensuring trading depth and price stability. This model significantly lowers the participation threshold and stimulates enthusiasm for ecological construction.

By June 2025, the Virtuals ecosystem has demonstrated significant scale and economic effects: the cumulative 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 nearly nurtured over 80% of the AI agents on this Layer-2 platform, and its generative multimodal agent framework G.A.M.E has become a popular choice for agents in the Web3 gaming and metaverse fields. However, Virtuals' vision goes far beyond becoming a 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 the key to Virtuals achieving this grand goal, and will be a focus of its development for a long time to come.

02, Virtuals Issuance Model: Creating a New Paradigm for AI Asset Issuance

To attract more user attention, Virtuals has innovatively introduced the "Genesis Launch" mechanism for the issuance of AI agent tokens. Unlike traditional linear airdrops or fixed issuances, Genesis Launch is based on the concept of "Virgen Points," emphasizing participation and contribution rather than pure speculation. Once launched, Genesis Launch quickly became a sensation across the internet, and now participating in Virtuals' token offerings has become a hot new activity that speculators are eager to join, with even seasoned players discussing how it might replace the once-popular "Alpha Airdrop" model. In contrast to traditional airdrops, which are distributed all at once and often lead to immediate sell-offs by users, Genesis Launch places greater emphasis on "contribution equals distribution," allowing everyone the opportunity to participate in new token subscriptions based on genuine input. Almost every day in the official Virtuals Protocol community, members can be seen sharing screenshots of their earnings from participating in new token offerings using Virgen Points, a public and transparent set of rules and thresholds that has completely overturned the situation of "large holders monopolizing, while retail investors are left out."

Taking IRIS as an example, the project launched its pre-sale in mid-May, locking in over 120 million points in less than 24 hours, with an oversubscription reaching 1500%, as tens of thousands of users shared 37.5% of the community shares. On the day of its listing, IRIS's market value soared from $200,000 to $80 million, an increase of over 400 times, breaking the industry record for AI Agent issuance and instantly overshadowing the previously popular projects in other ecosystems.

The rapid popularity of Genesis Launch is primarily due to its construction of a "Incentive---Contribution---Reward" closed loop. Firstly, users can earn basic Virgen Points by staking VIRTUAL or holding in-demand 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. This way, whether you are a novice or an experienced trader, you can find a suitable way to contribute in terms of financial investment or content promotion, greatly enhancing community activity and innovation.

In stark contrast, traditional airdrops often rely solely on token snapshots or the completion of complex tasks. Most users sell the tokens on the same day they receive them. According to data from platforms, over 90% of airdrop tokens experience significant price drops within 15 days post-issuance, with a retention rate of less than 12% after three months. The Genesis Launch adopts a points locking + punitive cooling mechanism: if the newly acquired tokens are sold within 24 hours after unlocking, it will trigger a 10-day points reset, significantly curbing the arbitrage behavior of those looking to "squeeze profits" and encouraging participants to hold long-term and continue contributing.

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 market opens, ensuring that there is no awkward situation of "unable to buy at a price" or "unable to sell an order" on the exchange or DEX. To prevent large holders or bots from seizing a large share through multi-wallet strategies, Genesis Launch sets a limit of no more than 0.5% of the total issuance for each address and further balances the distribution using an on-chain randomization algorithm, ensuring that small and medium users can also gain a considerable share.

The success of the Virtuals new issuance model lies not only in the popularity of new token issuances but also in 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 steadily rising: by mid-June 2025, the daily trading volume of VIRTUAL on this Layer-2 network had exceeded $150 million, an increase of over 80% compared to May; at the same time, holding and staking VIRTUAL to obtain veVIRTUAL governance tokens can also continue to earn additional Virgen Points, leading a large number of users to lock up their assets and participate in ecosystem governance for the 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 the underlying asset was launched on a certain platform, supporting trading with leverage of up to 2000 times. On its first day, the contract trading volume broke through 700 million USD, strongly conveying a message: Virtuals are becoming a new target for speculation and hedging in the eyes of institutional investors.

03, Theory of Ecological Evolution ------ The Thrilling Leap from Issuance Platform to AI Sovereign Society

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 merely an AI agent issuance platform, which quickly gathered a group of enthusiastic developers and users through token economic mechanisms such as locking liquidity and repurchasing for destruction. As hundreds of AI agent projects were implemented, the agents began to operate independently and autonomously monetize in scenarios such as gaming, content creation, and market analysis. Users were no longer just spectators but became co-builders and beneficiaries. The Genesis Launch connected project growth and community participation through the logic of "contribution equals distribution," promoting the free flow of capital 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 obtained through staking veVIRTUAL for governance rights, and sharing transaction fees and repurchase dividends, combining the identities of "participants" and "owners" in the token economy. All of this is building a prototype of a digital nation operated by countless autonomous agents and co-governed humans.

So far, this ecosystem has demonstrated several milestone achievements: the security audit agent IRIS in a certain Layer-2 network Genesis Launch was listed with a 1500% oversubscription rate, with its market value soaring from $200,000 to $80 million; the virtual idol Luna achieved a monthly income of $1.2 million through fan donations, with its ERC-20 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 data not only reflect the feasibility of the agent business model but also prove that the "AI agency economy" is moving from theory to reality.

With the continuous maturation 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 characterized by the symbiosis and co-governance of countless AIs and humans from the ground up ------ this is true ecological evolution, and the thrilling leap towards an "AI sovereign society" has just begun.

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