The investment value of VIRTUAL

Source: Dao Talks Blockchain

AI agents are a sector I am very optimistic about in this round of market trends. Although the entire sector has now fallen silent for various reasons, there are still many projects within the sector that are continuously being built 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 crypto space. Virtual is no exception. Moreover, the entire AI agent space has only just emerged, making information in this regard even more scarce.

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 of last year (

This message reveals that the annualized revenue of the Virtual project at that time was 300 million dollars. The definition of this "revenue" is unclear, and I estimate it to be income. Since no further data can be found, 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 (

The news shows that Virtual's daily income fell 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 the future free cash flow. To estimate future free cash flow, we can only rely on the current free cash flow to make predictions and linear extrapolations. However, the information at hand is insufficient to calculate the current free cash flow. Therefore, here we can only reluctantly use "revenue" as a substitute for free cash flow for estimation.

Last December was the peak period for the AI agent track, so the first piece of information above shows that the annualized revenue of 300 million USD at that time was its peak value.

At the end of February this year, it can be 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 around 160 million to 3.6 billion USD.

From this estimation process, we can see that there is quite a large 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" sector look like?

Secondly, how will Virtual's positioning and development in this track evolve?

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 will be the same as the scenes and models we see today.

In the Web 3 ecosystem, the current state of this track is obviously not very good.

But if we step away from the crypto ecosystem and take a look at the broader AI landscape, we will find that currently, 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 terms of commercialization, and their subscription fee income is simply not enough 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 track.

Regarding the second point, among the many AI + Crypto projects currently, 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 or how advanced their displayed technologies are, still show no obvious profitability to date, let alone boldly disclose their revenue status.

Therefore, in the current AI + Crypto sector, the revenue situation of Virtual's future is highly uncertain, but looking around the entire sector, I 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 assessment of the value of project tokens, I have expressed my views in several previous articles:

The value of a purely governance token is extremely limited; it must either become a token with real equity value or transform into an essential "commodity" for the project. Only such tokens have value.

In this regard, Virtual has clearly stated that it hopes to develop the token into a currency for daily use in the "nation" of AI agents in the future, and has been implementing similar practices in its ongoing operations.

Whether this goal can be achieved can only be proven by time, but the approach of striving towards "practicality" is correct. Therefore, in this regard, it is much stronger than many established projects.

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

As of the time of writing, the fully circulating market value of Virtual is $580 million. If we calculate based on the lower limit of "intrinsic value" at $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 bit more patience, so I will hold on to the token I have.