AI Agent Tokens or Speculative Meme Coins?

Virtuals Protocol, a decentralized platform that allows users to create, own, and monetize AI agents across various virtual environments, is seeing over 1,000 tokens being created every day. 

AI Agent tokens created on the platform now hold an overall market cap of more than $1.8 billion, according to CoinGecko. 

Are AI Agent Tokens the New Meme Coins? 

According to Dune data, more than 21,000 AI Agent tokens were created on Virtuals Protocol in November alone. Tokens like AIXBT and LUNA surged over 300% within days of launch. 

The platform’s popularity also drove its native token, VIRTUAL, to an all-time high last week, gaining more than 200% in November. 

AI Agent tokens represent fractional ownership and governance rights over specific AI agents within the Virtuals Protocol ecosystem. When a new AI agent is created, the protocol mints a fixed supply of tokens associated with that agent. 

These tokens are added to a liquidity pool, establishing a market for the agent’s ownership. Token holders can participate in decisions regarding the agent’s development and receive a share of the revenue generated through the agent’s activities.

According to users, the key appeal of Virtuals Protocol is its accessibility. It mirrors the App Store’s impact on mobile apps but adds a speculative layer similar to prediction markets, allowing users to invest in agents they believe in.

Developers receive direct feedback through market activity, users gain stakeholder incentives, and capital naturally flows to promising projects.

A Promising Fair Launch Platform or Another Pump.Fun? 

Given the operational model, the comparison between Virtuals Protocol and Pump.fun is very evident. Both platforms offer users a launchpad to create and co-own digital assets. 

While Virtuals Protocol differentials itself by focusing on AI agents, there are speculations that these tokens are ultimately the same as meme coins.  

“They are much more than just memecoins but I like the meme coin analogy because ai agents live and breathe on twitter with attention/impressions being their oxygen. So, the memetic elements of their identity feel more innate/important than that of L1s/platforms (for which usage metrics exist outside of socials),” influencer Markus wrote on X (formerly Twitter).

Critics of Virtuals Protocol express concerns about the quality and sustainability of AI agents created on the platform. Users fear an influx of low-quality or speculative projects. There are also concerns about the platform’s ability to maintain long-term engagement and value generation.

At the same time, these concerts are legitimate, as Pump.fun has received significant backlash over the past months. The platform recently came under fire after users started misusing its live stream feature for harmful content.

“The label of memecoins is being given to the broad category of tokens that are launched by an individual where the token is fully unlocked and liquid at genesis. These coins can be memecoins (WIF, PEPE). But they can also become any other type of coin (GOAT, ANON, CLANKER). We’re conflating the genesis mechanism of coins with being a meme,” David Hoffman wrote on X. 

Meanwhile, the utility of tokens created via these platforms is questionable. As BeInCrypto reported earlier, over 60% of traders in Pump.fun meme coins lose money. Less than 10% traders are making any real profits.

So, similar concerns have also spilled over to Virtuals Protocols and its AI agent tokens. However, there is some optimism, as AI agents are increasingly being used to handle more blockchain transactions.

Overall, the true potential of the Virtual Protocols ecosystem remains to be seen. If the developed AI agents become more useful in segmented blockchain operations, these tokens can effectively be differentiated from speculative meme coins.