Image source: Shenchao TechFlow
Recently, memes created by AI agents have gradually become a hot topic in the market, and people have begun to pay attention to narratives related to AI agents + memes.
Pump.fun is a big part of the meme’s continued popularity.
It has become an efficient "coin printing machine", greatly liberating the process of token asset creation, issuance and management; so you see the emergence of thousands of cats and dogs on Solana every day.
However, when Pump.fun promoted the movement of creating meme assets, the meme assets themselves had no real income and business logic; in addition, the current meme creation is also more PVP-oriented, making it even more difficult to obtain Alpha income.
Instead of fighting fiercely among memes, it is better to focus on fresher asset creation models and platforms similar to pumpfun.
When Pump.fun takes off the meme currency “ICO”, maybe you should pay more attention to “IAO”.
Turning our attention to another narrative that continues to be hot---AI, the AI agent sector has been developing. What if it is combined with the Pump.fun asset issuance model?
Recently, Virtuals Protocol, which focuses on AI agent co-creation, released its new IAO platform, which literally translates to "initial AI agent release". An explanation that is too long to read is:
Anyone can create an AI Agent, and each AI Agent corresponds to a token; when the AI Agent is used by other apps to generate income, holding tokens can share the income, and the income will also buy back the corresponding tokens to Increase token value.
Image source: Shenchao TechFlow
The key point here is that relying on AI agents, the platform has created a new model of asset issuance that is more interesting than pure air memes - the AI agents are responsible for helping you generate income and holding tokens to share the income.
In the super cycle where memes are prevalent, can the IAO model allow you to find more opportunities in the general trend of asset creation?
How does Virutals Protocol's IAO platform operate specifically, and what possible impact will it have on Virtuals tokens?
Everyone creates an AI agent together, and everyone can issue corresponding tokens
Before understanding the use and functions of the IAO platform, you must first understand what these AI Agents are doing.
Virutals Protocol's business is mainly oriented to the digital entertainment industry. We have previously introduced it in detail in the article (AI Factory Born for Games, Everyone Can Contribute and Benefit). You can understand it as an AI co-created by everyone. Agent.
Different people contribute various AI large models and different combinations of images, voices and personalities to generate virtual characters; this virtual agent can speak, move, learn, plan and make decisions in 3D space, while interacting with the environment; and can be on-chain Use wallets to conduct transactions in the world.
The more attractive point is that the AI agent has memory, can maintain the coherence of memory, personality and interaction in different applications, and can support unlimited content generation.
Here is a simple example. A virtual idol can collect gifts from you in Tiktok, chat with you in Telegram, and decide to play on-chain games with you in Roblox;
If you find a sword, the virtual idol can help you sell it for tokens with your consent...
Virtuals Protocol has more than 1,000 agents in six months since its business was launched. Among them, the flagship Luna shown in the picture below has more than 500k fans on TikTok.
Image source: Shenchao TechFlow
Sounds great. Wait, but what does this have to do with the issuance of tokens and IAOs we are going to talk about?
From the perspective of Token economy, you need to think about 2 key points.
Ownership binding: Who owns the AI Agent above? In fact, in different entertainment and games, it can point to common ownership behind it, and tokens have become the most suitable form of expression of ownership-holding currency represents joint ownership of the Agent and becomes a "shareholder" of the AI Agent. ”.
Right to share profits: The interaction between AI Agents in different applications and games is actually the call to the AI model behind it. Don’t forget, just like GPT, calling the interface will generate income, and these incomes can flow to the corresponding Token Holder--the currency holding represents the profit-sharing rights of the "shareholders". When the Agent's business is prosperous, it can obtain dividends and corresponding Tokens increase in value.
After understanding the above logic, let’s take a look at what Virutals Protocol’s IAO platform is doing specifically:
Based on real AI Agent business, generate corresponding tokens
Tokens represent ownership and profit-sharing rights, and equity is linked to Agent’s business performance
Everyone can create such an AI agent, and everyone can issue and hold corresponding tokens
Now, we can take a closer look at the pages and functions of this IAO platform more intuitively.
Image source: Shenchao TechFlow
(Note: Interested players can also visit here directly to experience the platform’s AI agent creation and token issuance)
The first is to create an AI Agent.
Any developer or even an individual can start a new AI Agent on the IAO platform of Virtuals, and the creation process is permissionless. The specific page is shown in the figure below.
Image source: Shenchao TechFlow
It is worth mentioning that there are not many technical barriers to agent generation. You only need to describe the role, tone and behavior pattern you want the agent to play, and the system will automatically use the AI model to generate the corresponding agent.
Second is the locking of $Virtuals tokens.
When the Agent is created, a specified number of $Virtuals tokens must be locked. This amount is used to create a liquidity pool for the new agent’s tokens, paired with $Virtuals, similar to the pool for $SOL-xx coins on Pump.fun.
Image source: Shenchao TechFlow
After the tokens are locked, new tokens representing the AI agent you created are minted, and the name is generally the same as the name of the agent.
Subsequently, this proxy token will have a total supply fixed at 1 billion and will be added to the liquidity pool with $Virtuals tokens; and the same fair launch logic will be adopted, without reservations for internal teams and rounds. .
After the above steps are completed, you will enter the normal transaction process.
You can still trade this AI Agent token like trading memes, and the platform will display the price and liquidity of the corresponding AI Agent token; but it will also provide more information to provide a basis for whether the Token is worth investing in, such as:
The origin of the creator of each component of the Agent
In which applications is the Agent currently used and interacted with?
The Agent’s current live broadcast situation is as shown below
Image source: Shenchao TechFlow
Overall, in this IAO platform, 100% fairly launched AI agent tokens will be selected and purchased by players in the market; at the same time, the income and transaction fees generated by the agent will also be channeled through the sub-DAO of each AI agent. Decided to issue bounties to the creators and developers of AI agents.
Image source: Shenchao TechFlow
At the same time, don’t forget that if you want to buy any proxy token, you must first hold the Virtual currency, just like you must have $SOL to buy memes.
Then all purchases of proxy tokens will be converted into Virtutal’s local currency, which will theoretically push up the price of Virtual’s local currency.
AI agent generates income and holds currency to share growth
The above has clearly explained the agent creation and token creation process of the IAO platform. The rationale seems obvious, but how does an AI Agent’s income come from? How can the token be affected and rise?
On a platform like IAO, the logic of finding Alpha begins to change—from discovering memes with a hundredfold return to discovering AI agents with a hundredfold return rate.
In layman's terms, you can think of it as holding "stocks" in AI entrepreneurial teams with business growth potential.
After the AI entrepreneurial team makes the AI agent, it is promoted, used and interacted in different applications --> generates calls to the Agent --> calls generate income --> income is shared with currency holders
In this logical loop, the token corresponds to the AI agent's expectation of making money; therefore, you need to find an Agent that performs better and share profits from the income, similar to dividends from stock holdings.
Image source: Shenchao TechFlow
The method of dividend distribution is closely related to the buyback mechanism (Buyback). A complete example can be:
Each time a new AI agent is created, a market for AI Agent ownership is created; anyone who believes that the AI agent has the potential to grow can purchase tokens.
Real-world users, such as fans who interact with AI agents on Tiktok, will generate income through various payment behaviors, such as attending virtual idol concerts, purchasing goods, live streaming gifts and other personalized interactions.
Income flows to the developers of the AI agent, and part of the income is also injected into the on-chain vault (On-chain Vault, which collects funds for the future growth and operating costs of the agent).
Here comes the most important point. As income accumulates in the on-chain treasury, these incomes will regularly trigger the repurchase of the corresponding AI agent tokens. For example, if TaylorSwift's agent (assuming authorization) holds a virtual concert to increase revenue, the revenue will be purchased in $SWIFT tokens and destroyed after purchase.
What does this buyback mean?
First of all, it will inevitably reduce the supply of SWIFT tokens. If other conditions remain unchanged, it will push up the currency price and increase the overall market value of the token;
Next is the forward cycle. When an agent performs well in real-life business, more income will be generated to repurchase tokens, leading to a higher currency price; and higher income inflows will push up the market value of AI agents, and more people will hold and pay attention to them. .
Image source: Shenchao TechFlow
The theory sounds good, but will there really be a market for these AI agents in reality?
Virtuals is currently creating a variety of AI agents to put on the market, taking the lead in prototyping and incubating applications to verify the feasibility of this business model.
1. LUNA: Self-created AI virtual idol and live streaming agent on TikTok.
Equipped with memory and interactive functions, each live broadcast can add about 2,000 fans and generate revenue by calling the AI Agent service. TikTok has reached 500,000 followers; the stream has reached more than 5.6 million users, with 159,000 staying to watch.
Image source: Shenchao TechFlow
2. Project Westworld: An autonomous agent town on Roblox, 10 agents live in Westworld
Everyone has their own unique personality, desires and goals, which can interact independently with the game environment and affect the player's interaction and experience, providing more unlimited dialogue, interaction and unexpected plot content.
Image source: Shenchao TechFlow
3. AIWAIFU: A formed chat AI agent. Players can talk to different WAIFUs in the game to increase their favorability.
Public data shows that there are currently 200,000+ players participating, the 30-day game retention rate is greater than 7%, and the average conversation lasts 12 minutes. The willingness to continue dialogue is prominent and the stickiness is strong.
4. The Heist: The first playable intelligence on Telegram. It can interact in mini-games. More importantly, when it comes to on-chain assets, it can also independently manage on-chain transactions. It can be regarded as the entire chain. Attempts to commercialize AI agents.
Image source: Shenchao TechFlow
5. Sanctum: AI RPG game on Telegram, still in Alpha testing stage.
You can establish an interactive relationship with the characters in the game. The player's AI hero is not just a follower, but will get better and know more through interaction with you.
In addition to these prototypes of its own, starting in the fourth quarter, Virtuals Protocol will open its platform to third-party applications, inviting external developers, game studios, and consumer applications to deploy their own AI agents.
As the ecosystem develops, the AI agent market created by this open IAO platform may bring more income to AI agents, further increasing their market value and the value of the corresponding tokens.
Not Pump.fun, better than Pump.fun
Finally, we can use a table to summarize, what are the similarities and differences between Virutals Protocol's IAO and pump.fun?
Image source: Shenchao TechFlow
In addition to these inherent characteristics, starting in November, the IAO platform will also launch incentive activities. Everyone can issue their own AI agent tokens, but if you are among the top 3 tokens on the hot list, you can also receive a total prize pool of Reward of 60,000,000 Virutal Tokens.
Image source: Shenchao TechFlow
This move is obviously to encourage top AI agents to draw more liquidity from the liquidity pool and improve market efficiency; at the same time, it is a disguised incentive for creators to continuously improve their agents to stay competitive.
Through the incentive plan, better AI agents will inevitably come out. On the other side of the boom in token trading, there will be actual business and income streams.
Conclusion: When AI agents become a revenue-generating asset
In the current market environment, the grand narrative of pure AI
It is a more timely combination model to capitalize AI Agents, share rights and benefits, and promote transactions and price discovery.
Virutal Protocol's IAO, the corresponding token assets may be of higher quality than pure air memes, and more down-to-earth than pure grand AI narratives. Only projects like this that can expand their own brands and traffic in asset transactions are worthy of attention.
If the AI agents created by various AI teams can really spread, after the scale effect, Virtuals will be more like an encrypted version of A "GEM" stock. Investors are waiting for the currency to rise, choose better agency models, and contribute to unlocking more entertainment experiences;
At the same time, this model at least provides a new investment perspective - finding better AI agents and capturing new opportunities in popular AI narratives.
Let’s wait and see how far the AI version of Pump.fun can go.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
This article is reproduced with permission from: (Shenchao TechFlow)
