The investment value of VIRTUAL

Source: Dao Talks Blockchain

AI agents are a sector that I am very optimistic about in this round of market trends. Although the entire sector is currently quiet for various reasons, there are still many projects within the sector that are continuing to build and improve.

Virtual is one of them.

In this article, I will attempt to analyze the investment value of Virtual from a financial perspective.

As I mentioned in the previous article, there is a significant lack of information regarding the financial status of projects in the current crypto space. Virtual is no exception. Moreover, the entire AI agent sector has only recently emerged, making information in this area even scarcer.

There are two pieces of information I can find online that have some reference value:

The first item is the financial information publicly released by the Virtual team on their Twitter on December 31 last year (

This message reveals that the annualized revenue of the Virtual project at that time was 300 million USD. The definition of "revenue" is unclear, and I estimate it refers to income. Since we cannot find further data, we will temporarily use "income" for estimation.

The second item is a piece of news published on TradingView at the end of February this year (

This news shows that Virtual's daily income dropped from 1 million dollars on January 2nd of this year to 35,000 dollars on February 27th.

To estimate the intrinsic value of Virtual, we need to look at future free cash flows. To estimate future free cash flows, we can only rely on the existing free cash flows to make predictions and linear extrapolations. However, the information at hand is simply insufficient to calculate the current free cash flows. Therefore, here we can only reluctantly use "revenue" as a substitute for free cash flow in our estimation.

Last December was the peak period for AI proxy racing, so the first piece of information above showing an annualized income of 300 million USD was its peak value.

At the end of February this year, it was considered a low period for AI agents, with a daily income of $35,000, which translates to an annual income of $13 million.

I still use 12 as the estimated value for "future PE." So the "intrinsic value" of Virtual is roughly between $160 million and $3.6 billion.

From this estimation process, we can see that there is a significant gap between the optimistic and pessimistic valuations of its intrinsic value.

The biggest reason for this gap is the uncertainty of the project's future development. This uncertainty can be further broken down into two aspects:

What will be the future development of the "AI agent + Crypto" track?

Second, how will Virtual's positioning and development in this track be in the future.

Regarding the first point, I have always been optimistic about its future development, but what is uncertain is whether the application scenarios and business models in this track in the future will be the same as the scenarios and models we see today.

The current situation in this track of the Web 3 ecosystem is clearly not very good.

However, if we step away from the cryptocurrency ecosystem and take a broader look at the AI sector, we will find that whether in Web 2 or Web 3, there are very few application projects that have truly found a good business model. Even top projects like OpenAI are currently lacking in commercialization, as their subscription revenue is simply insufficient to support their operations.

Among all AI companies, only Nvidia, as an infrastructure provider, has a good business model.

So this is probably not just a problem of the crypto ecosystem, but a problem of the entire AI sector.

Regarding the second point, among the many AI + Crypto projects, Virtual is one of the few projects I have seen that is profitable. The vast majority of other projects, no matter how cool the described scenarios are or how advanced the displayed technologies are, have yet to show any obvious profitability, let alone boldly disclose their revenue status.

So in the current AI + Crypto track, the revenue situation of Virtual in the future has a lot of uncertainty, but looking around the whole track, I also don't see many projects that have better certainty than it.

We have very roughly estimated the intrinsic value of Virtual, and now we need to look at its "price". Here we can only look at its tokens.

Regarding the judgment of the project token value, I have expressed my views in several previous articles:

The value of a purely governance token is extremely limited; only by becoming a token with real equity value or transforming into an essential "commodity" for the project can such tokens hold value.

In this regard, Virtual has clearly stated its future intention to develop the token into a currency used daily in the AI agent "country", and has been implementing similar practices in its ongoing operations.

Whether this goal can be achieved can only be proven over time, but the approach of striving towards "practicality" is the right one. So in this regard, it is much stronger than many long-established projects.

Finally, let's assess whether the current token price is overvalued.

As of the time of writing, the fully circulating market value of Virtual is $580 million. If we calculate using the lower bound of the "intrinsic value" of $160 million, it is definitely overvalued. Therefore, I will not buy more. However, for such a track and such a project, I am willing to give it a bit more patience, so I will hold onto this token I have.