Author: TechFlow
Recently, AI agents creating memes has gradually become a market hotspot, and people have begun to pay attention to narratives related to AI agents + memes.
The meme continues to be popular, and Pump.fun behind it deserves credit for this.
It has become an efficient "coin printing machine", greatly liberating the process of token asset creation, issuance and management; so you see thousands of cats and dogs appearing on Solana every day.
However, when Pump.fun promoted the movement to create Meme assets, the Meme assets themselves had no real income and business logic; coupled with the fact that the current Meme IPOs are more PVP-oriented, it is even more difficult to obtain Alpha returns.
Instead of fighting fiercely in the meme world, it is better to focus on fresher asset creation models and platforms similar to pumpfun.
When Pump.fun makes MEME coin's "ICO" popular, 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 would happen if it was 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 means "Initial AI Agent Offering". A long explanation 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 revenue, the token holder can share the revenue, and the revenue will also repurchase the corresponding token to increase the value of the token.
The key point here is that, relying on AI agents, the platform has created a new asset issuance model that is more interesting than pure air memes --- AI agents are responsible for helping you generate income, and holding tokens to share the profits.
In the super cycle of Meme prevalence, can the IAO model help you find more opportunities in the general trend of asset creation?
How does the IAO platform of Virutals Protocol operate specifically, and what possible impacts will it have on the Virtuals token?
Everyone creates AI agents 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 aimed at 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 think of it as an AI Agent created by everyone.
Different people contribute various AI models and different image, voice and personality combinations to generate virtual characters; the virtual agent can speak, move, learn, plan and make decisions in 3D space, while interacting with the environment; and can use wallets to conduct transactions in the on-chain world.
What’s even more attractive is that AI agents have memory and can maintain the consistency of memory, personality, and interaction in different applications, supporting unlimited content generation.
Here is a simple example. A virtual idol can collect your gifts in Tiktok, chat with you in Telegram, and decide to play an on-chain game with you in Roblox;
If you hit a sword, the virtual idol can also help you sell it for tokens with your consent...
Virtuals Protocol has had more than 1,000 agents in six months since its launch. Its flagship Luna, shown in the figure below, has more than 500k followers on TikTok.
Wait, but what does this have to do with what we are talking about with token issuance and IAOs?
From the perspective of Token economy, you need to think about two key points.
Ownership binding: Who owns the AI Agent mentioned above? In fact, in different entertainment and games, there can be common ownership behind it, and tokens are the most suitable form of ownership. Holding tokens represents common ownership of the Agent and becoming a "shareholder" of the AI Agent.
Profit-sharing rights: AI Agents interact in different applications and games, which is actually the call to the AI model behind the scenes. Don’t forget that, just like GPT, calling the interface will generate income, and these incomes can flow to the corresponding Token Holder --- holding coins represents the profit-sharing rights of "shareholders". When the Agent business is booming, dividends and corresponding token appreciation can be obtained.
After understanding the above logic, let’s take a look at what Virutals Protocol’s IAO platform is doing specifically:
Generate corresponding tokens based on real AI Agent business
Tokens represent ownership and profit sharing rights, and the rights are linked to the Agent’s business performance.
Anyone can create such an AI agent, and anyone can issue and hold the corresponding tokens
Now, we can take a closer look at the pages and functions of the IAO platform.
(Note: Interested players can also visit here directly to experience the platform's AI agent creation and token issuance)
The first step is to create an AI Agent.
Any developer, even individuals, can launch a new AI Agent on Virtuals’ IAO platform, and the creation process is permissionless. The specific page is shown in the figure below.
It is worth mentioning that there is not much technical threshold for generating an agent. You only need to describe the role, tone and behavior pattern you want the agent to play, and the system will automatically generate the corresponding agent using the AI model.
The second is the locking of $Virtuals tokens.
When an Agent is created, a specified amount of $Virtuals tokens must be locked. This amount is used to create a liquidity pool for the new agent's token, paired with $Virtuals, similar to the pool of SOL-xx tokens on Pump.fun.
After locking the tokens, new tokens representing the AI agent you created are minted, usually with the same name as the agent.
Subsequently, this proxy token will have a fixed total supply of 1 billion and will be added to the liquidity pool with $Virtuals tokens; and the same fair launch logic will be adopted, with no reservations for internal teams and rounds.
After completing the above steps, you will enter the normal transaction process.
You can still trade the AI Agent token like you would Meme, and the platform will show you 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 creators of each component of the Agent
In which applications is the Agent currently used and interacted?
The current live broadcast status of the Agent is as follows
In general, in this IAO platform, AI agent tokens with a 100% fair launch 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 determined by each AI agent’s sub-DAO, and rewards will be issued to the creators and developers of the AI agent.
At the same time, don’t forget that if you want to buy any proxy tokens, you must first hold Virtual’s native currency, just like you need SOL to buy Meme.
Then all purchases of proxy tokens will be converted into Virtutal’s native currency, which will theoretically push up the price of Virtual’s native currency.
AI agents generate income, and holders share growth
The above article has explained the agent creation and token creation process of the IAO platform. The principle is clear, but how does an AI Agent earn income? How can the token be affected and increase in value?
On platforms like IAO, the logic of finding Alpha begins to change - from discovering 100x Memes to discovering AI agents with 100x returns.
In layman's terms, you can understand it as holding "stocks" of AI startup teams with business growth potential.
After the AI startup team creates an AI agent, it is promoted, used and interacted in different applications --> Generates calls to the Agent --> Calls generate revenue --> Revenue is shared with coin holders
In this logical cycle, the token corresponds to the AI agent's expectation of making money; therefore, you need to find agents with better performance and share the income, similar to dividends from stock holdings.
The way of dividend distribution is closely related to the buyback mechanism. A complete example can be:
First, every time a new AI agent is created, a market for AI agent ownership is created; anyone who believes that the AI agent has growth potential can purchase tokens.
Second, real-world users, such as fans who interact with AI agents on Tiktok, will generate revenue through various paid behaviors, such as attending virtual idols’ concerts, purchasing merchandise, giving gifts during live broadcasts, and other personalized interactions.
Third, revenue flows to the developers of the AI agent, and a portion of the revenue is also injected into the on-chain vault (which collects funds for the future growth and operating costs of the agent).
The most important point is that as revenue accumulates in the on-chain treasury, it will periodically trigger the repurchase of the corresponding AI agent tokens. For example, if Taylor Swift's agent (assuming authorization) holds a virtual concert to increase revenue, the revenue will purchase $SWIFT tokens and destroy them after purchase.
What does this buyback mean?
The first is to reduce the supply of SWIFT tokens, which, other things being equal, will push up the price of the token and increase the overall market value of the token.
The second is a positive cycle. When the agent performs well in real business, it will generate more income to repurchase tokens, resulting in a higher price. Higher income inflows push up the market value of the AI agent, and more people will hold and pay attention to it.
It sounds good in theory, but will there really be a market for these AI agents in reality?
Virtuals is currently creating a variety of AI agents to launch into the market, taking the lead in prototyping to incubate applications and verify the feasibility of this business model.
LUNA, a self-created AI virtual idol and live streaming agent on TikTok.
With memory and interactive functions, each live broadcast can add about 2,000 fans, and call AI Agent services to generate revenue. TikTok has 500,000 fans; streaming media has reached more than 5.6 million users, of which 159,000 people stayed to watch.
Project Westworld, an autonomous agent town on Roblox, 10 agents living in Westworld
Everyone has their own unique personality, desires and goals, can interact with the game environment autonomously, and influence the player's interaction and experience, providing more unlimited dialogue, interaction and unexpected plot content.
AI WAIFU is a fully-fledged chat AI agent. Players can talk to different WAIFUs in the game to increase their favorability.
Public data shows that there are currently more than 200,000 players participating in the game, with a 30-day game retention rate of more than 7% and an average conversation time of 12 minutes. The willingness for continued conversation is prominent and the stickiness is strong.
The Heist, the first playable intelligent agent on Telegram, can interact in mini-games. More importantly, when it comes to on-chain assets, it can also autonomously manage on-chain transactions. It can be seen as an attempt to commercialize the entire chain AI agent.
Sanctum, an AI RPG game on Telegram, is still in the Alpha testing phase.
You can establish interactive relationships with the characters in the game. The player's AI heroes are not just followers, but will reach a higher level and understand more through interaction with you.
In addition to its own proofs, Virtuals Protocol will open its platform to third-party applications starting in the fourth quarter, 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 corresponding tokens.
Not Pump.fun, but better than Pump.fun
Finally, we can use a table to summarize the similarities and differences between Virutals Protocol's IAO and pump.fun.
In addition to these inherent features, starting in November, the IAO platform will also launch an incentive campaign where everyone can issue their own AI agent tokens, but if you are in the top 3 of the hot list, you can also receive a total prize pool of 60,000,000 Virutal tokens.
This move is clearly intended to encourage top AI agents to extract more liquidity from the liquidity pool and improve market efficiency; at the same time, it is also a disguised incentive for creators to continuously improve their agents to remain competitive.
Through incentive plans, better AI agents will inevitably emerge. On the other side of the hot token trading, there will be actual business and revenue streams.
Conclusion: When AI Agents Become a Revenue-Generating Asset
In the current market environment, the grand narrative of pure AI x crypto has gradually been falsified. AI still needs to be combined with the comfort zone of encryption, that is, "creating assets and facilitating transactions", in order to have room for continued survival.
It is a more appropriate combination model to assetize 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, more down-to-earth than purely grand AI narratives, and only projects 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 be rolled out, Virtuals will be more like an encrypted version of A-shares after the scale effect. Investors hold their coins and wait for the price to rise, select better agent 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.
