The Transformation of Virtuals Protocol: From GameFi Disappointment to the Rise of AI Agents

In June 2025, the crypto world witnessed an unprecedented wealth transfer: the new project IRIS launched 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 an astonishing record with a 400-fold increase. This achievement not only far surpassed the previous record for growth but also made other blockbuster projects from different ecosystems look pale in comparison. As the driving force behind this miracle, the platform token VIRTUAL of the Virtuals Protocol achieved a 400% growth within six months, with its market value peak surpassing $5 billion. Today, this platform has become the largest AI agent launch platform on a certain Layer-2 network. Behind this nationwide celebration is, in fact, an experimental wealth distribution based on reconstructed contribution rules, subtly reshaping the speculative logic and value order of the crypto market.

The Rebirth from GameFi Remains to AI Agent Issuing Platform

Virtuals Protocol is a decentralized platform deployed on a Layer-2 network, dedicated to pioneering an on-chain AI agency economy that allows users to easily create, co-own, and monetize autonomous AI roles. Its predecessor was a gaming guild established in Malaysia in 2021, which initially focused on Play-to-Earn projects and the NFT community. With precise positioning in multiple popular GameFi projects, the guild successfully raised approximately $16 million, reaching a valuation close to $600 million at one point, accumulating a wealth of gaming assets and an active player community. However, the bear market in 2022 severely impacted the GameFi sector, causing the guild's token price to plummet nearly 99%, with its market value shrinking to less than $6 million. The team's attempts at multiple business lines all ended in failure, and the project was on the verge of being shelved.

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. Through on-chain DAO voting (with a support rate of up to 90%), the community voted to completely transform into an AI-driven protocol, renaming itself Virtuals Protocol, with a core strategy shifting 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 is enormous, but creators only receive a small portion of the revenue; at the same time, experiments on a gaming platform proved that AI-driven NPCs could significantly improve player retention rates. This data directly led to the positioning of Virtuals as "profitable AI personalities."

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

Leveraging the success momentum of projects like Luna, Virtuals launched 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 capitalization temporarily 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 barrier, high incentive" mechanism is highly attractive: users only need to stake about 10 VIRTUAL (approximately $200) to create a new AI agent, which automatically generates a liquidity pool locked for 10 years; once the token's market value reaches about $500,000, the system will release a liquidity layer on decentralized exchanges, ensuring trading depth and price stability. This model significantly lowers the participation threshold and stimulates enthusiasm for ecological development.

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 nurtured over 80% of the AI agents on this Layer-2 chain, and its generative multimodal intelligent agent framework has 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 the key to Virtuals achieving this grand goal and will be a focus of its development for a long time to come.

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

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)", emphasizing participation and contribution rather than pure speculation. Once launched, Genesis Launch quickly became a sensation across the internet, and now Virtuals has become a new hot spot for speculators eager to participate in token launches. Unlike traditional airdrops that are distributed in one go, often leading users to sell immediately, Genesis Launch emphasizes "contribution equals distribution", allowing everyone the opportunity to participate in new token subscriptions based on their genuine contributions. Almost every day in the official community of Virtuals Protocol, members can be seen sharing screenshots of their earnings from participating in token launches using Virgen Points, completely overturning the scenario of "rich people monopolizing, retail investors being left out" with its open and transparent rules and thresholds.

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 subscriptions exceeding 1500%, and tens of thousands of users sharing 37.5% of the community share. On the day of listing, IRIS's market value skyrocketed from $200,000 to $80 million, with an increase of over 400 times, setting a new industry record for AI Agent issuance.

The reason why Genesis Launch was able to rapidly gain popularity lies in its construction of a "incentive-contribution-reward" closed loop. First, users can obtain basic Virgen Points by staking VIRTUAL or holding popular AI Agent tokens within the ecosystem; secondly, users can also accumulate more points by participating in social promotion, trading on the platform, or staking other project tokens. In this way, whether you are a technical novice or an experienced trader, you can find a suitable way to contribute through financial investment or content promotion, greatly stimulating community activity and innovation.

In stark contrast, traditional airdrops often rely solely on holding snapshots or completing complicated tasks, and users mostly sell the tokens they receive on the same day. According to data from a certain trading platform, over 90% of airdropped tokens experience a significant price drop within 15 days of issuance, with a retention rate of less than 12% after three months. The Genesis Launch, on the other hand, employs a points locking and punitive cooldown mechanism: if the newly acquired tokens are sold within 24 hours after unlocking, it will trigger a 10-day points reset, greatly curbing the arbitrage behavior of "wool pullers" and encouraging participants to hold long-term and contribute continuously.

At the same time, the platform provides ample liquidity support for new token listings. Each Agent Token is paired with a certain amount of VIRTUAL or stablecoins injected into the liquidity pool before the opening, ensuring that liquidity shortages are avoided on exchanges or decentralized exchanges. To prevent large holders or bots from seizing a substantial share through multiple wallet arrangements, 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-sized users can also reap considerable shares.

The success of the Virtuals new token issuance model lies not only in the popularity of new token releases but also in the "old brings new" effect of the Virtuals ecosystem tokens. Since the large-scale launch of Genesis, the trading volume and price of VIRTUAL have been rising sharply: by mid-June 2025, the daily trading volume of VIRTUAL on this Layer-2 chain has exceeded $150 million, an over 80% increase 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, which encourages 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 "contributing for returns." In June 2025, the world's first perpetual contract based on VIRTUAL was launched on a trading platform, supporting up to 2000 times leverage trading. On the first day of its launch, the contract trading volume surged past 700 million USD, strongly conveying a message: Virtuals are becoming a new target for speculation and hedging in the eyes of institutional investors.

Ecological Evolution Theory: The Thrilling Leap from Token Issuance 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" clearer. In the initial stage, Virtuals was just an AI agent issuance platform, quickly gathering a group of enthusiastic developers and users through token economic mechanisms such as locking liquidity and buyback and burn. With hundreds of AI agent projects landing, agents began to operate independently and autonomously monetize in scenarios like gaming, content creation, and market analysis. Users are no longer just spectators but 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 an open SDK and cross-chain support; through the Agent Commerce Protocol (ACP), agents can sign, deliver, settle, and repurchase on-chain, achieving a true self-governing commercial closed loop; community participation is achieved by staking veVIRTUAL to gain 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 a certain mainnet Genesis Launch was listed with an oversubscription rate of 1500%, and its market value soared from $200,000 to $80 million; the virtual idol Luna earned $1.2 million a month through fan donations, with its token market value exceeding $120 million; the hedge fund format VADER has been steadily operating in a cross-chain environment, with a market value of over $100 million. These data not only reflect the feasibility of the agent business model but also prove that the "AI agent 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 days to come, AI agents will not only be props and tools but will also become "digital citizens" with independent decision-making power and economic rights, participating alongside humans in production, governance, and even cultural creation. Virtuals will no longer be a simple platform; instead, it is nurturing a new type of society from the ground up, characterized by the symbiosis and co-governance of countless AIs and humans—this is true ecological evolution, and the thrilling leap towards an "AI sovereign society" has just begun.