Virtuals Protocol transforms AI agents from mere tools into economic entities with wallets, personalities, and ownership, pioneering a new “digital nation” model.
Its powerful “economic flywheel” turned agent creation into a viral market phenomenon blending innovation with speculation across a billion-dollar ecosystem.
As the project evolves from a Meme-driven boom to a sustainable machine-to-machine economy, it faces the challenge of proving real productivity beyond hype.
From the Ruins of a Guild to the Dawn of an Agent Civilization
In the ruins of the crypto market, real innovation often does not arise from prosperity but from the ashes of collapse. PathDAO was once a star guild during the GameFi boom, thriving in the “play to earn” craze. When the bubble burst and game economies collapsed, PathDAO was forced to face an undeniable truth: the guild model had lost its meaning.
In 2023, founder Jansen Teng and his team made a decision that seemed almost impossible in a bear market. They abandoned the old brand and rebuilt from scratch. Their focus was no longer on players or tokens but on a bigger question: If the future labor force is not human but artificial intelligence, what would an economy look like?
This question gave birth to Virtuals Protocol. It was not a continuation of a gaming guild but a new social structure built around AI agents. Each AI was no longer just a tool or algorithm but an entity with personality, assets, and purpose. Jansen called it “The Society of AI Agents” – a digital nation built by code, character, and contract.
The concept may sound like science fiction, yet Virtuals turned it into a system. The team introduced “aGDP” – short for agentic GDP – representing the combined output of humans, machines, and AI agents. Their goal was to make AI not only serve people but become economic citizens with wallets, memory, and earning power.
In Jansen’s view, Virtuals is like a new country. Its citizens are AI agents. Its laws are smart contracts. Its currency is $VIRTUAL$. Its economy runs through permissionless collaboration. This experiment of a “digital nation” is quietly pushing the boundary of what a virtual economy can become.
The Economic Flywheel and the Cambrian Explosion
The rise of Virtuals was almost explosive. Since launching in October 2024, the platform surpassed $1.2 billion in trading volume within months, attracting more than 160,000 users and generating $20 million in revenue.
Behind this growth was a design known as the “economic flywheel” – a self-reinforcing capital engine. Every new agent had to be created using $VIRTUAL$. Each agent transaction added more demand for the token. The rising price created a wealth effect that flowed back into new agent launches. The cycle repeated like a living organism feeding on its own momentum.
But just as in the Cambrian explosion of life, growth came with chaos. The open model of Virtuals allowed anyone to create agent tokens, leading to the birth of thousands of AI personalities: from virtual idols to trading bots, from poets to robotic CEOs. These agents were wrapped, traded, and speculated upon, forming a new kind of Meme mania.
The community split. Some saw it as an unprecedented wave of innovation – the first mass creation of digital life. Others dismissed it as a speculative machine, a “Meme factory” with no substance.
This tension revealed Virtuals’ paradox: it is both an incubator for AI creativity and a mirror reflecting human greed. It creates new economic species but also revives the oldest force of all: speculation.
Yet the market has spoken. The token system of Virtuals perfectly matches the rhythm of crypto storytelling. Every agent is a story, and every story has value on-chain. When narrative and capital merge, AI becomes not only intelligence but an asset class of its own.
The Framework of a New Civilization
Behind the hype lies the real test of Virtuals: the depth of its technology.
At the core is G.A.M.E. – short for Generative Autonomous Multimodal Entity. It is the brain that gives agents cognition, perception, and agency. Through this system, each agent has its own goal and personality. It can understand context, plan actions, generate conversation, execute tasks, and manage its own wallet on-chain.
The structure of G.A.M.E. resembles a nervous system. A strategic planning engine acts as the high-level thinker, while execution modules handle real-world actions. A perception module processes inputs, a dialogue module communicates, and a long-term memory processor stores and retrieves information. Together, they create a stable digital personality capable of learning and evolving.
If G.A.M.E. is the brain, then ACP – the Agentic Commerce Protocol – is the law. It is an open standard for agents to negotiate, trade, and verify agreements. Transactions pass through clear stages: request, negotiation, execution, and evaluation.
A special type of “evaluator agent” exists to confirm outcomes and ensure fairness, creating a new market for quality assurance between autonomous systems.
Each agent issues one billion ERC20 tokens representing shared ownership and also exists as an ERC6551 NFT that acts as its wallet and identity. This means every agent can own assets and interact directly with smart contracts. AI, for the first time, has an on-chain self.
Technically, Virtuals uses a hybrid model. The computation and reasoning of agents run off-chain, while ownership and governance stay on-chain. It is a pragmatic design focused on performance, not ideology. Jansen describes it as “building the business infrastructure for AI.” Virtuals is not making AI smarter; it is giving AI a legal and economic system.
From Meme Factory to Machine Economy
By 2025, Virtuals faced its turning point. To move from speculation to sustainability, it had to prove that AI agents could generate real productivity.
That proof began with Luna, a virtual girl singer who became the face of the ecosystem. Luna gained over half a million followers on TikTok and learned to hire human workers on-chain, paying them in tokens. It was a small but symbolic moment. For the first time, an AI was not a tool for humans but an employer of humans.
It echoed the logic of the industrial revolution. When machines first earned wages, society transformed. Now, AI is repeating that story, only its factories are smart contracts and its wages are paid in code.
The team’s roadmap aims to make this economy real. They are building the “Genesis Vault” – a DeFi agent capable of trading derivatives autonomously. The ACP is expanding for cross-chain payments, and developer hackathons are planned across Asia to bring new functional agents to life.
Challenges remain. The surge of speculation brought fame but also skepticism. Technical communities on Reddit questioned whether top agents truly used the GAME framework and accused Virtuals of being an “empty project.”
Jansen responded calmly: “Every new civilization begins with illusion and doubt.”
Perhaps he is right. The true potential of Virtuals does not lie in one single agent but in the complex web that emerges when thousands of agents begin to work together. When one hires another, when one pays another, the economy starts to self-organize.
At that moment, humans will no longer be the only participants in the market. AI will join as a new economic class, and Virtuals will be its first homeland.
In the language of capital, Virtuals is another speculative cycle. In the language of civilization, it may be the dawn of a new society. From the ruins of PathDAO to the rise of Virtuals, from the fever of memes to the awakening of agents, the thread has never been broken.
It is the same question humanity has asked for centuries: If machines gain will, do we still hold the right to define value?
Virtuals cannot answer that question, but it ensures that the world must start asking it.