The investment value of VIRTUAL

Source: Dao Speaks 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 continuously being developed and improved.

Virtual is one of them.

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

As I mentioned in my previous article, information about the financial status of projects is very scarce in the current cryptocurrency 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 found online that hold 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 this "revenue" is unclear, and I estimate it to be income. Since no further data can be found, we will provisionally use "income" for estimation.

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

This news shows that Virtual's daily income dropped from $1 million on January 2nd of this year to $35,000 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 currently only rely on existing free cash flows to predict and linearly extrapolate. However, the information at hand is simply insufficient to calculate the current free cash flow. 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 the AI agency track, so the annualized income of 300 million dollars shown in the first piece of information at that time 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 estimate for "future PE." So the "intrinsic value" of Virtual is approximately $160 million ~ $3.6 billion.

From this estimation process, we can see that there is a considerable 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 the future development of the "AI agent + Crypto" track look like?

Second, how will the positioning and development of Virtual in this sector 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 sector will be the same as the ones we see today.

In the Web 3 ecosystem, the current state of this sector is clearly not very good.

However, if we step away from the crypto 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 fee income is insufficient to support their operations.

Among all AI companies, only Nvidia, which acts solely 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 track.

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

Therefore, in the current AI + Crypto arena, the revenue situation of Virtual's future has a lot of uncertainty, but looking across the entire field, I don't see many projects that have better certainty than it.

We have 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 assessment of the value of project tokens, I have expressed my views in several previous articles:

The value of a pure governance token is extremely limited; only tokens that become truly valuable in terms of equity or transform into essential "goods" for the project hold value.

In this regard, Virtual has clearly stated its hope to develop the token into a currency for everyday use in the AI agent "nation" in the future, and has been implementing similar practices in its operational activities.

Whether this goal can be achieved can only be proven with time, but the effort to move towards "practicality" is the right approach. So in this regard, it is much stronger than many long-established projects.

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

As of the time of writing, the fully circulated market value of Virtual is $580 million. If we calculate based on the lower limit of the "intrinsic value" of $160 million, it is definitely overvalued. So I will not buy more. However, for such a track and such a project, I am willing to give it a little more patience, so I will keep the token I hold.