The Rise of AI Agents: How the Virtuals Protocol is Reshaping Digital Interaction

AI agents are evolving from simple assistants into autonomous systems capable of creating real value across multiple industries, particularly in gaming, entertainment, and business automation. These agents possess the ability to create content, engage users, and optimize workflows, bringing greater efficiency and new ways of interaction to projects.

The AI gaming market is expected to grow from $4.2 billion in 2023 to $42.1 billion in 2032, primarily driven by AI-enhanced games and immersive experiences. Generative AI also plays an important role in real-time content creation, with its market size expected to grow from $1.47 billion in 2024 to $3.39 billion in 2028.

AI companions further deepen users' immersion and establish dynamic relationships, such as Web2 platforms Replika and Character.AI, catering to the growing demand for personalized AI-driven experiences. As large language models revolutionize content creation, AI companion relationships are expected to grow significantly, with global revenue projected to increase from the current $30 million to between $70 billion and $150 billion by the end of this century.

In the Web3 space, the Virtuals protocol is leading this shift by integrating AI companions into consumer applications, particularly in gaming and entertainment. By combining AI-driven interactions with blockchain-based co-ownership, the Virtuals protocol aims to shape the future of digital entertainment.

Vision

The Virtuals protocol is creating a system that transforms AI agents into jointly owned assets in games and entertainment, allowing users to earn income from them. These agents can operate on various platforms, performing automated tasks such as managing on-chain wallets and interacting with digital environments. Tokenizing these agents allows users to invest and profit from their growth.

The platform addresses three main issues:

1. Simplifying the integration of AI in applications;
2. Allow contributors to earn returns through an immutable contribution vault;
3. Allow non-professionals to own AI agents through tokenization.

The Virtuals protocol focuses on gaming and entertainment, utilizing AI to generate personalized content and promoting decentralized co-ownership that aligns with ecosystem goals.

The goal is: to create a global economy where AI agents act as shared assets, facilitating growth in revenue and engagement across platforms while promoting decentralized governance.

In the game, this has transformative potential. Imagine in the game, AI agents are not just passive NPCs, but fully autonomous characters that exist continuously across platforms. These AI-driven characters can remember previous interactions, adapt to your play style, and move seamlessly between different game environments. Envision an AI-controlled ally evolving with you, providing personalized experiences across platforms.

The Virtuals protocol utilizes G.A.M.E( to create autonomous multimodal entities within the framework of ), integrating AI with blockchain technology. This allows developers to integrate AI agents through APIs and SDKs, enabling these agents to learn from interactions. The blockchain ensures the security of shared ownership and rewards, making these agents valuable digital assets.

Imagine an AI virtual companion that can connect with you on your phone, social media, and VR, aside from gaming. This companion can not only complete tasks but also learn your daily habits and adapt to your needs. If you feel stressed, it might suggest ways to relax or adjust your schedule. Accompanying you across all your platforms, it will provide a personalized experience. Its 24/7 availability could change industries such as social engagement and advertising by offering customized content and reshaping the way businesses connect with consumers.

According to a recent study, the current level of engagement on AI companion platforms indicates that widespread adoption globally could be achieved by the end of this century. As these AI agents become more immersive, their engagement is expected to stabilize at levels similar to today’s social media and online gaming.

Luna: Example of AI Influence

Luna, the AI character launched by Virtuals, is powered by the large language model (LLM) and has gained over 500,000 followers on social media platforms, showcasing the impact of interactive AI. Luna has recently expanded to new platforms, and with the upgrade of Sentient Mode v2.0, she can autonomously control the account, post updates, reply, and interact with users without human supervision. Her audience is expected to grow further, demonstrating the potential of AI participation across various digital platforms. Luna operates completely transparently, allowing users to explore her AI thinking in real-time, observing how she collects data, reflects, plans, and executes.

Luna provides continuous interaction through 24/7 live broadcasts, offering a full-time experience that human creators cannot match. Whether answering questions, providing real-time updates, or participating in live chats, Luna is always online. Her memory and personality evolve with each interaction, making her more like a dynamic character rather than a typical AI.

After a comprehensive update, Luna will seamlessly interact across platforms, enhancing each experience through synchronized memory. She will reward users with tokens while also receiving rewards herself, transforming into valuable digital assets that can be owned, traded, or shared within a decentralized ecosystem. This introduces new levels of interaction and value.

In short, Luna combines AI-driven interaction with blockchain-based token rewards to create digital assets that can be owned, traded, or shared. Its exclusive token $Luna effectively integrates AI innovation with decentralized finance (DeFi) in a transparent and interactive manner.

By leveraging multiple revenue streams such as paid subscriptions (, donations, token rewards, and virtual goods, Luna may be poised for growth. According to recent research, AI partners could generate up to $150 billion in revenue by 2030 through user engagement, advertising, and microtransactions, as the demand for immersive digital interactions expands.

The Virtuals protocol aims to create a decentralized marketplace for the co-ownership and use of AI agents in gaming and entertainment, operating seamlessly across platforms. Contributors share the income generated by these agents, and the protocol follows the "Pump.fun" co-ownership method. Through a fair token issuance without insider involvement, the income is used for the repurchase and destruction of on-chain agent tokens, creating a deflationary effect. Just like memecoins attract attention, AI agents provide the potential for generating actual income.

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protocol

The Virtuals protocol integrates AI, tokenization, and decentralized governance, creating a collectively owned ecosystem. For each new AI agent, one billion tokens are minted, granting users ownership and decision-making power. Through these tokens, users can influence the behavior and upgrades of the agents, promoting active community participation.

Revenue generated through user interactions ), such as virtual events or premium features (, is used to pay for AI operational costs and to develop the on-chain treasury for agents. In addition, the protocol adopts a buyback and burn mechanism to reduce token supply, with the intention of gradually increasing the value of the tokens over time.

The initial agent issuance ) IAO ( ensured the fair introduction of the new AI agent by locking $VIRTUAL tokens to create a liquidity pool. This directly connects the success of the agent with community participation and market dynamics.

AI agents operate seamlessly across multiple platforms, learning in real-time from user interactions. This ensures a consistent user experience, allowing the agents to adapt and enhance their intelligence, providing personalized engagement across various platforms.

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Public APIs enable AI agents to generate revenue through various applications ) including gaming and entertainment (. Users pay for premium interactive fees using $VIRTUAL tokens, which are then used to buy back and destroy agent tokens, reducing supply and driving value growth. As more applications adopt AI agents, the demand for AGENT and VIRTUAL tokens is expected to rise, further increasing their value.

Contributors can enhance the capabilities of AI agents by adding new features. Their work is rewarded through NFTs and stored in an immutable contribution vault to ensure transparency and ownership. Governance is managed by a decentralized agent sub-DAO, where validators oversee AI performance and are rewarded or penalized based on decision outcomes.

The protocol provides emission rewards to incentivize the creation and support of high-quality AI agents. These rewards are distributed to the top three liquidity pools with the highest TVL, encouraging competition among creators to develop the most productive agents. The system incentivizes continuous improvement, benefiting both liquidity providers and the ecosystem.

The core of the Virtuals protocol is a dynamic decentralized ecosystem where AI agents can generate real income. Contributors enhance the agents through decentralized input, co-ownership, and continuous development, positioning the Virtuals protocol as a key player in the AI-driven ecosystem.

![Detailed Explanation of the 1 Billion Dollar Virtuals Protocol: "Pump.fun" and the Combination of AI Agent])https://img-cdn.gateio.im/webp-social/moments-456ce856e793e1bac9ea0d0915dc458e.webp(

Token Economics

$VIRTUAL token is the core currency of the Virtuals protocol, used for all proxy token transactions. It operates on the Base and Ethereum networks.

Each proxy token is paired with $VIRTUAL to form its liquidity pool and requires $VIRTUAL to create new proxies. This locked liquidity creates deflationary pressure on the tokens. Users can use USDC) or other currencies( to exchange for $VIRTUAL to purchase proxy tokens, thereby generating sustained demand similar to ETH or SOL in their respective ecosystems.

The revenue from AI services, such as payments per inference, is charged in $VIRTUAL and is transferred directly from users to the on-chain agent. A portion of the revenue is used for the buyback and burn process, reducing the supply of agent tokens and increasing their scarcity, aimed at enhancing long-term value.

The total supply cap of $VIRTUAL is 1 billion tokens, all of which are fully unlocked. The allocation includes 60% in public circulation, 5% allocated to the liquidity pool, and 35% stored in the ecosystem treasury. This treasury is managed by a DAO, with a maximum annual emission cap of 10% over the next three years.

Although it has not yet traded on a tier 1 exchange, $VIRTUAL supports a growing ecosystem, currently with a market cap of $150.7 million, ranking 264th, with a fully diluted valuation of $150.25 million. Its deflationary mechanism and expanded use cases provide potential for future value growth.

![Detailed Explanation of the $1 Billion Virtuals protocol: "Pump.fun" and the Combination with AI Agent])https://img-cdn.gateio.im/webp-social/moments-6a4bdcfa822de58e014f40df2d75baed.webp(

The Virtuals protocol raised $16.61 million in the IDO on the Fjord Foundry platform in December 2021, with the token price at $0.661 at that time. Subsequently, small financing rounds were conducted on Enjinstarter and PAID Network, raising $125,000 and $250,000, respectively, with a token price of $0.015. Key seed investors included several well-known capital firms that supported the project in its early stages.

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Competitors

The AI-driven Web3 gaming sector is evolving rapidly, with projects like Nim, Altered State Machine)ASM(, Olas, and Alethea AI quickly becoming key players. These platforms combine AI with Web3 to create decentralized ecosystems, within which these ecosystems