The investment value of VIRTUAL

Source: Dao Says Blockchain

AI agents are a sector I have high hopes for in this round of market trends. Although the entire sector has fallen into silence for various reasons, there are still many projects within the sector that are continuously being built and refined.

Virtual is one of them.

In this article, I attempt to analyze the investment value of Virtual from a financial perspective.

As I mentioned in my previous article, there is a significant lack of information regarding the financial status of projects in the current cryptocurrency landscape. Virtual is no exception. Moreover, the entire AI agent sector has only recently emerged, making information in this area even scarcer.

There are two pieces of information I can find online that have certain reference value:

The first item is the financial information publicly released by the Virtual team on their Twitter on December 31st last year (

This message reveals that the annualized revenue of the Virtual project at that time was 300 million USD. The definition of "revenue" is unclear, and I estimate it refers to income. Since no further data can be found, we will tentatively use "income" for estimation.

The second piece is a news announcement published on tradingview at the end of February this year (

This news shows that Virtual's daily income fell from $1 million on January 2 of this year to $35,000 on February 27.

To estimate the intrinsic value of Virtual, we need to look at future free cash flow. To estimate future free cash flow, we can only rely on the current free cash flow to make predictions and linear extrapolations. However, the information at hand is simply not enough to calculate the current free cash flow. Therefore, here we can only reluctantly use "revenue" as a substitute for free cash flow for estimation.

Last December was the peak period for the AI agent track, so the first piece of information above shows that the annualized income at that time was 300 million USD, which is its peak value.

At the end of February this year, it was considered a low tide period for AI agents, with a daily income of $35,000, which translates to an annualized income of $13 million.

I still use 12 as the estimated value for "future PE". So the "intrinsic value" of Virtual is approximately 160 million ~ 3.6 billion USD.

From this estimation process, we can see that there is a considerable gap between optimistic and pessimistic valuations of its intrinsic value.

The biggest reason for this gap is the uncertainty of the project's future development. This uncertainty can be further broken down into two aspects:

What will the future development of the "AI agent + Crypto" track look like?

Second, how will the positioning and development of Virtual in this track be?

Regarding the first point, I have always been optimistic about its future development, but what I am not sure about is whether the future application scenarios and business models of this track are the scenarios and models we see today.

In the Web 3 ecosystem, the current state of this track is clearly not very good.

But if we step away from the crypto ecosystem and look at the broader AI landscape, we will find that there are very few application projects that have truly found good business models, whether in Web 2 or Web 3. Even top projects like OpenAI currently have little to show in terms of commercialization, and their subscription fee revenue is simply not enough to support their operations.

Among all AI companies, only Nvidia, as an infrastructure provider, has a good business model.

So this is probably not just a problem of the crypto ecosystem, but a problem of the entire AI track.

Regarding the second point, among the many AI + Crypto projects currently, Virtual is one of the few projects I have seen that is profitable. The vast majority of other projects, no matter how cool their described scenarios are or how advanced the displayed technologies are, still show no obvious profitability to date, let alone boldly disclose their revenue status.

So in the current AI + Crypto track, the revenue situation of Virtual in the future has a lot of uncertainty, but looking around the entire track, I don't see many projects that have better certainty than it.

We have very roughly estimated the intrinsic value of Virtual, and now we will look at its "price". Here we can only look at its tokens.

Regarding the assessment of the value of project tokens, I have expressed my views in several previous articles:

The value of a purely governance token is extremely limited; it only becomes valuable when it turns into a token with real equity value or becomes an essential "commodity" for the project.

In this regard, Virtual clearly states that it hopes to develop the token into a currency used daily in the AI agent "country" in the future, and has been implementing similar practices in its ongoing operations.

Whether this goal can be achieved can only be proven by time, but the approach of striving towards "practicality" is the right one. Therefore, in this regard, it is much stronger than many long-established projects.

Finally, let's evaluate whether the current token price is overestimated.

As of the time of writing, the fully circulating market value of Virtual is $580 million. If we calculate based on the lower limit of the "intrinsic value" of $160 million, it is definitely overvalued. Therefore, I will no longer buy in. However, for such a track and such a project, I am willing to give it a bit more patience, so I will keep the token I hold.