What is Virtuals Protocol (VIRTUAL)? Discover the Next Generation Game AI

In the context of artificial intelligence transforming the entire gaming industry, an increasingly common question within the blockchain community is: what does “virtual” mean when combined with blockchain technology? Virtuals Protocol was created to answer that question. It is not just a simple AI project but a comprehensive ecosystem that allows anyone to create, own, and generate revenue from independent AI agents.

Unlike OKZOO or Sleepless AI, which focus on games or AI companions, Virtuals Protocol goes further by enabling the community to build and own virtual agents in a decentralized manner. This is a significant step toward redefining the value of AI in the digital world.

Virtual Agents - Independent AI Characters That Generate Revenue

Virtuals Protocol is built on Base, a layer 2 blockchain developed by Coinbase. At the core of this project is the concept of “virtual agents” — autonomous virtual characters capable of performing tasks, interacting with their environment, and most importantly, generating income.

What sets Virtuals Protocol apart from typical AI agents is that these virtual actors are not just support tools but independent digital entities capable of owning cryptocurrency wallets, managing their own assets, and even participating in economic activities. Currently, there are two main types of agents: IP Agents (representing specific personalities like Luna with over half a million followers) and Functional Agents (designed to optimize user experience, such as the G.A.M.E. framework).

The capabilities of virtual agents are diverse: from natural communication, moving in 3D space, executing on-chain transactions, to learning from experience and adapting to new situations. As a result, they become indispensable tools in blockchain applications.

Shared Ownership Mechanism: Democratizing Control of Virtual Agents

One of the most notable features of Virtuals Protocol is its “co-ownership” model. Instead of AI agents being fully controlled by a single company or individual, this system allows anyone to own a share of an agent through a VIRTUAL token.

When a new AI agent is created, a pool token linked to it is added to liquidity pools. Token holders not only benefit from the revenue generated by the agent but also have voting rights on its development, behavior, and future upgrades.

Revenue streams for virtual agents come from each interaction on the platform, called “inference fees.” These fees flow directly into the system, with a portion used to buy back and burn tokens, creating scarcity and increasing value for token holders.

Technical Architecture: From Modular Consensus to Immutable Contribution Vault

On the technical side, Virtuals Protocol employs a modular consensus framework to streamline interactions among participants. This process involves three steps: Contributors submit improvements (models, datasets, or AI upgrades), Validators evaluate these proposals using a Delegated Proof of Stake (DPoS) mechanism, and if approved, contributions are converted into Service NFTs.

All accepted contributions are stored in the Immutable Contribution Vault (ICV) — an immutable storage on the blockchain. The ICV functions as a multi-layer system, where each virtual agent is an ERC-6551 NFT acting as an independent wallet capable of transactions. This structure ensures complete transparency and fair distribution of rewards.

Contributing developers are rewarded proportionally to the value of their contributions, creating a clear incentive system for continuous improvement.

Impact on GameFi: Virtual Agents as Valuable Assets

Virtuals Protocol is changing the way we view GameFi. Instead of seeing AI merely as a support tool, this project allows people to see virtual agents as assets that can be invested in and profitably utilized. This opens up a whole new dimension: earning revenue from AI characters you own.

Unlike traditional NPCs in games, these virtual actors can develop independently, interact with various applications (games, social media, entertainment platforms), and manage their own assets. This combination creates a completely new economic model for GameFi.

Furthermore, democratizing AI ownership via blockchain means anyone—from professional developers to everyday users—can participate in this ecosystem without needing permission from large corporations.

Current Value and Outlook

As of February 18, 2026, the VIRTUAL token is trading at $0.62, down 4.54% in the past 24 hours. Despite short-term market fluctuations, the long-term potential of this project lies in its ability to build a complete ecosystem for virtual agents.

The success of Virtuals Protocol will depend on developers creating useful, engaging, and revenue-generating virtual agents in real-world applications. The more agents are created and the more users engage with them, the greater the value of the ecosystem.

Virtuals Protocol represents a fundamental shift in how we perceive virtual assets and AI within blockchain. By enabling the community to create, own, and earn from AI agents, this project ushers in a new era of collaboration between humans, AI, and blockchain.