Virtuals Protocol's Revenue Plunges to Just $500 a Day Amid Crypto AI Agent Decline

Virtuals Protocol, an AI agent creation and monetization platform that once boasted a multibillion-dollar valuation, has experienced a dramatic revenue drop in recent months. According to Blockworks researcher Sharples, the platform’s daily revenue now barely exceeds $500, a significant decline from earlier this year when it was generating upwards of $500,000 per day.

The collapse in revenue coincides with a steep downturn in the platform’s native token, VIRTUAL, which peaked at $4.61 on January 2, 2023. By April 7, the token’s value had plummeted to just $0.42, marking a 90% drop in its price. At its height, Virtuals had been generating substantial income and facilitating the creation of over 1,000 new AI agents daily. However, there has been a noticeable slowdown, with no new AI agents launched on the platform for over a week.

The Virtuals Protocol had initially surged in popularity thanks to its innovative use of AI agents in the crypto space. These agents were designed to perform various tasks and engage with users on a decentralized platform. However, despite initial success, the market for crypto-based AI agents has cooled, as reflected in the platform’s sharp revenue drop.

Virtuals Protocol’s AI agents have generated a total lifetime revenue of $39.1 million. Source: Dune Analytics

One of the main contributing factors to this decline is the diminished interest in AI agents, which many users now consider ineffective. AI commentators, including BitDuke, have criticized these agents for their lack of functionality, with some labeling them as “garbage.” This shift in sentiment has led to a significant drop in demand for the platform’s services and tokens. Furthermore, the broader cryptocurrency market is also in a downturn, which has compounded the struggles faced by Virtuals.

As the platform continues to grapple with these challenges, some industry observers speculate that market conditions and the platform's business practices, such as withholding token taxes that other platforms might return, may have contributed to its decline. Despite this, some AI experts remain hopeful for a resurgence in AI technology, acknowledging that while the current versions of AI agents may not be groundbreaking, there is potential for future improvements.

In summary, Virtuals Protocol’s fall from its peak highlights the volatility of the AI agent market, which is still evolving. Whether AI agents will make a comeback remains to be seen, but for now, Virtuals finds itself in the midst of a significant downturn.