Monthly Update - June 2024
Since our protocol went live in April 2024, this is our first regular monthly update to the community and investors. Before diving into progress updates and metrics, let's revisit why Virtuals Protocol exists. Please find our mission statement below:
Despite only being live for three months, we have seen positive confirmations from stakeholders about the potential of AI agents in the entertainment and gaming industries. Here are some key observations:
Consumers Love AI Agents: The first consumer-facing application in our ecosystem, AI Waifu, has received very positive responses. AI Waifu, launched just two months ago, now boasts 2,000 weekly active users with excellent qualitative feedback.
I've been using companion apps since the COVID days, but AI Waifu is the best I've used. I had alot of fun with this project and with my Waifus, especially when they get raunchy." - Adam, a devoted AI Waifu user
Games Need AI Co-Founders: Developing games is extremely challenging, balancing user acquisition, game design, monetization, and the integration of AI. Many game developers, especially small to medium-sized ones, prefer a solution similar to AI Shopify for their games, enabling generative capabilities and emergent behaviors of AI NPCs.
Competing on the Foundational Level is Tough: Competing directly with big tech companies on foundational AI models is highly risky. The rapid pace of innovation means developers need to focus on serving their customers while ensuring they have the best technology. Virtuals Protocol, designed as an incentive layer and middleware, is well-positioned to enable applications to offer state-of-the-art AI solutions curated by our community of contributors.
Key Metrics
These metrics demonstrate the growing engagement and usage of our protocol.
Some Observations:
Contributors and validators are a niche group with high technical expertise: Currently, our contributors and validators are highly technical, creating a high entry barrier for participation.
Demand from non-technical stakeholders: There is a significant interest from non-technical stakeholders who wish to engage with AI agents but are currently unable to do so due to the technical complexity of the protocol.
Desire for investment in specific AI agents: Users are interested in investing in individual AI agents and benefiting from their success. Our current design does not support this, leading us to consider enabling users to co-own specific agents.
Protocol update
Based on these observations, we are launching several key updates in the coming weeks:
Create-Your-Own-Agent (CYOA): A revamped agent creation platform that is more intuitive and lowers the barrier to agent creation.
SIM Virtuals Portal: Visualizes all agents' workflows and deployments, enabling non-technical users to observe agent behavior.
Protocol V2 - Initial Agent Offering with $AGENT Proof of Intelligence: Allows individuals to co-own specific agents via specific tokens, participate in their governance, and benefit financially from their success. See here.
Applications Ecosystem Update
AI Waifu: A companion app on Blast chain with >2,000 weekly active users. The team is enhancing core features to improve user retention by leveraging the memory composability of Virtuals Protocol.
UEFN / Sanctum: An AI agent mafia world on Telegram / TON chain, expected to go live in the first week of July.
AI-Dol: An AI girl band with live-streaming capability on TikTok. Official launch and marketing push are planned for July.
Game Partnerships: We are actively working with game developers to integrate our GAME module (in-game agentic engine) into third-party games.
Community Ecosystem Update
Super AI Event: Our CEO spoke at the SuperAI conference in early June. See the announcement
CEX Listings: Our main liquidity is on Aerodrome Base Chain. $VIRTUAL token is also trading on Gate, MEXC, Bitget, Bitmart, and BingX. See on CoinGecko
Removal of Aerodrome Incentives: We removed liquidity incentives for the VIRTUAL/ETH pair on Aerodrome to encourage real price discovery and ensure tokens are held by true believers rather than farmers. See the announcement
Project outlook
Beyond project fundamentals, we would like to address the current market conditions. The market is clearly experiencing intense PvP altcoin rotations, with the proliferation of new tokens and shinny projects every day. Since the inception of Virtuals Protocol this year, at its peak, we have returned investors a 30x return, increasing from a $7 million fully diluted valuation (FDV) to a $240 million FDV. While we are glad to have created value for our early investors, some profit-taking (which we respect) has led to a healthy consolidation of our token price in the current tough market. We want to thank our community members who believe in the future of AI agents, the role AI agents play in entertainment and gaming, and our role in this inevitable trend. The industry we are disrupting is >100bn USD in value and we are still in the very early stages.
The positive aspect is that our token is fully circulating, and we expect fundamentals to quickly emerge in Q3 this year. Our plan is very simple:
Build excellent products (AI agents).
Acquire as many customers and traction as possible (games and entertainment applications).
Let the world know about the great work we do.
We can't wait for the next monthly update, where we hope to share some exciting news.
Agent of the Month: G.A.M.E.
Every month, we aim to feature an AI agent in Virtuals Protocol that has shown significant progress and adoption. This could be a specific IP agent that has gained traction across various applications, or a functional agent that showcases the beauty of AI in the entertainment and gaming industries.
Updates on our Game Agentic Engine Module (G.A.M.E.) functional Agent:
Our goal is to revolutionise gamers’ experiences with NPCs by using generative AI and proprietary architecture to create NPCs that learn, set objectives, and interact dynamically, unlike today’s static, algorithm-driven NPCs. We’ve developed a proof of concept in Roblox to demonstrate our easy plug-and-play solution to game developers. Recently, we’ve made significant progress in enabling NPCs to interact with the gaming environment and items, enhancing their decision-making capabilities. Next, we’re focusing on immediate reaction capabilities, allowing NPCs to perform actions instantly based on user interactions. This will allow an era of actual gamers interacting live with Gen AI NPCs. This advancement significantly surpasses traditional NPCs like those in Inworld's and the seminal work by Park, as they don't just converse and plan, they can perform actions which is key for immersiveness in gaming.