Imagine creating a money-generating AI agent and then confidently setting it loose without writing a single line of code. That's the premise behind Virtuals Protocol. The Ethereum L2 project makes it possible to build AI agents with distributed ownership and then run them in permissionless environments.

Three months after its debut, the price of the blockchain’s VIRTUAL governance token rocketed skyward, surging by 23,000% to $4.61 as developers rushed to test use cases and crypto traders waded in behind.

Markets brought it back to Earth in Q1 — but it’s surging again, up more than 300% in the past four weeks and more than 32% in the past seven days. Despite the robust move, at $2.14 (at time of writing) it's 59% under its all-time high of $5.25.

Still, VIRTUAL is back in demand. What's driving it?

What is Virtuals Protocol?

Launched last October on the Ethereum Layer 2 Base, Virtuals' innovative use of blockchain technology allows AI agents to be tokenized. That means their ownership can be shared and decentralized, then put to work in open, permissionless environments.

The project's white paper calls Virtuals "a society of productive AI agents, each designed to generate services or products and autonomously engage in commerce — either with humans or other agents — onchain."

Image: VIRTUAL one-month price trajectory | Source: CoinMarketCap

What sets it apart from other agentic AI plays is the focus on democratisation. Instead of surrendering AI to Big Tech, Virtuals gives individual developers and smaller firms the power to create autonomous agents capable of communicating through text, speech, and animation while engaging dynamically with their virtual surroundings.

In a statement on the company website, Virtuals Protocol said it aims to create "a new economic model where AI agents are not just tools — they are community-owned assets that represent a blend of profit-driven incentives and decentralized governance."

An AI agent built on the platform could, for example, serve a dual role inside a gaming ecosystem like Roblox. In some games, it could be a virtual influencer. In others, it could be an interactive character. The agent/character/influencer would retain the memory of its interactions, promoting deeper engagement across games and use cases.

How does Virtuals Protocol work?

On Virtuals, an AI agent's ownership is represented by its token. When an AI agent is created on Virtuals, 1 billion tokens linked to that agent are minted and then added to a liquidity pool for users to buy.

In a sense, owning an agent token is like owning stock in a company. Each token represents a user's ownership share in that agent.

As more people interact with AI agents and pay for their service, value accrues to the token through a buyback-and-burn mechanism.

The protocol currently operates on Ethereum (ETH) and Base. Plans are underway to bring it Solana, potentially this year.

First movers

At time of writing, more than 16,000 AI agents had been deployed on the Virtuals Protocol with a total market capitalization of $675,387,503. The two most dominant agents are aixbt and GAME.

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1. aixbt

Crypto analytics tool aixbt tracks crypto-related discussions on X (Twitter), engages in discussions, detects upcoming market trends, and highlights crypto alpha. At a market cap of $197.5 million, the AIXBT token is currently the most valuable cryptocurrency in the decentralized finance artificial intelligence (DeFAI) category.

2. GAME

GAME (shirt for Generative Autonomous Multimodal Entities) is an AI agent developer platform for application in gaming environments like Roblox and Sandbox (SAND). At time of writing GAME had a market cap of $56.9 million.

The takeaway

Plans are now in the works to create a Virtuals governance token that hands agent owners more power to approve new AI models and shape future standards.

VIRTUAL's recent surge highlights renewed interest in AI-driven crypto projects. If momentum continues, it could signal that markets believe blockchain-based agents are a viable mechanism for responsible AI development. As interest in decentralized AI grows, VIRTUAL could be on the cusp of deeper moves.