The investment value of VIRTUAL

Source: Dao Says Blockchain

AI agents are a sector that I have high hopes for in this round of market. Although the entire sector is currently quiet for various reasons, there are still many projects within it that are continuing to build and improve.

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, there is a significant lack of information regarding the financial status of projects in the current cryptocurrency landscape. Virtual is no exception. Moreover, the entire AI agent sector has only recently emerged, so information in this area is even scarcer.

There are two pieces of information I can find online that are of certain 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 refers to income. Since I couldn't find any further data, we will provisionally use "income" for the 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 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 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 marked the peak period for the AI agency sector, so the annualized income of 300 million USD shown in the first piece of information 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 of "future PE." So the "intrinsic value" of Virtual is approximately 160 million to 3.6 billion US dollars.

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 the future development of the "AI agent + Crypto" track look like?

Secondly, how will the positioning and development of Virtual 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 field will be the same as the scenarios and models we see today.

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

However, if we step away from the crypto ecosystem and take a broader look at the AI field, 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, and their subscription revenue is simply not enough to support their operations.

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

So this is probably not just an issue of the crypto ecosystem, but rather an issue for the entire AI sector.

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

Therefore, in the current AI + Crypto track, the revenue situation of Virtual in the future has a lot of uncertainty, but looking around the entire track, I also 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 by becoming a token with real equity value or turning into an essential "commodity" for the project can such a token have value.

In this regard, Virtual clearly stated that it hopes to develop the token into the currency used daily in the AI agent "country" 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 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 limit of the "intrinsic value" of $160 million, it is definitely overvalued. Therefore, I will not buy more. However, for a track like this and such a project, I am willing to give it a little more patience, so I will retain the token I hold.