The investment value of VIRTUAL

Source: Dao Says Blockchain

AI agents are a sector I have high hopes for in this round of market trends. Although the entire sector is currently quiet for various reasons, many projects within the sector are still actively building and improving.

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 sector has only recently emerged, making information in this area even rarer.

There are two pieces of information I found online that have certain 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 USD. The definition of "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 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 2 this year to $35,000 on February 27.

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 existing free cash flow to make predictions and linear extrapolations. However, the information at hand cannot calculate the current free cash flow at all. 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 agency track, so the annual income of 300 million USD shown in the first piece of information 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 of "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 agency + Crypto" track look like?

Second, 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 of this track in the future will be the same as the scenarios and models we see today.

In the Web 3 ecosystem, the current situation in this field is clearly not very good.

However, if we step away from the crypto ecosystem and look at the broader AI landscape, we will find that there are very few application projects, whether in Web 2 or Web 3, that have truly found a good business model. Even top projects like OpenAI currently have little to show in terms of commercialization, and their subscription fee 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 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 the described scenarios are or how advanced the displayed technology is, have yet to show any obvious profitability, let alone boldly disclose their revenue status.

So in the current AI + Crypto space, the revenue situation of Virtual in the future has a lot of uncertainty, but looking around the entire space, 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 token.

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 by becoming a token that truly has equity value or by transforming into an indispensable "commodity" for the project can such tokens have value.

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

Whether this goal can be achieved can only be proven with time, but the effort towards a "practical" direction is the right approach. Therefore, 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 diluted market cap of Virtual is $580 million. If we calculate using 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 little more patience, so I will keep the tokens I hold.