Author: Marco Manoppo Compiled by: Deep Wave TechFlow

In bull markets, our social media is always Those success stories that achieve 100 times revenue are overwhelming (such as Hyperliquid's promotion, please stop flooding the screen). Yet we rarely discuss those missed opportunities.

In today's article, I want to review the story of Virtuals Protocol, share how I contacted the founding team in the early days, and as a venture capitalist, I am How I missed my first 100x opportunity.

Note: Strictly speaking, the first 1000x opportunity I missed was in 2019 I participated in Solana’s seed round investment through an angel friend in 2008, but I was not a real investor at that time.

Disclaimer: I am an investor in @primitivecrypto (PV). Although PV is not a venture capital company in the traditional sense, we will also conduct investment operations similar to venture capital. The opinions expressed in this article are my own.

Virtuals is one of the biggest missed investment opportunities I've had this cycle. The founding team first contacted me in July (during ETHCC) when their fully diluted valuation (FDV) was only $50 million. Before that, I actually heard about this project through mutual friends in the first quarter, and their valuation was even lower at that time. Fast forward six months later, and this AI agent tokenization platform has become one of the focal points of the current cryptocurrency cycle.

Virtuals co-founders Jansen and Wee Kee have indeed demonstrated extraordinary perseverance.

I distinctly remember their tireless efforts to introduce Virtuals to investors and industry insiders. Since they spend most of their time working in Southeast Asia (SEA), I heard from some friends in the crypto space about their rebranding from the PathDAO days, and their thoughts on AIThe theory of agent tokenization. This perseverance in continuing to move forward with the project despite a bear market and no major centralized exchange (CEX) listings is admirable. Many other founders might have chosen to return the funds or abandon the project, but the Virtuals team persisted and returned to the market stronger.

Earlier this year, we saw a number of projects combining cryptography and AI in an attempt to enable decentralized computing or inference. Frankly, many of these projects are just talk. Most projects don’t really have an effective way to engage the average user. Sure, you might get some airdrops by joining the network and running some calculations, but these are nowhere near as attractive as the pool2 model of GameFi or DeFi to attract the large-scale participation of ordinary investors.

At first, I thought these projects would use some kind of gamification to collect unique data, combined with consumer-focused applications to transform the experience. Be more unique - and maybe add some elements of "Ponzi economics". After all, data is still at the core of any AI model; and using “free internet currency” to incentivize people to share their unique data seems like a better way to do it.

Remember the third season of "Westworld"?

However, it turns out that the crypto market is heading towards polarization. We skip right past what I just mentioned and get to the asset issuance phase – which remains the most important product market fit (PMF) in crypto.

The Virtuals team is well-positioned to seize this opportunity with all of their previous efforts.

People often say that luck is what happens when preparation meets opportunity.

Here, I don’t need to go into details about what GOAT is; if you don’t understand this phenomenon, you can refer to this explanatory article. Simply put, GOAT sparked the craze about AI agent tokens because it got the market to start imagining the possibilities when AI agents could interact with a currency. Although GOAT has some limitations, such as requiring a certain degree of human intervention, the key point is that it allows people to believe that when AI agents encounter cryptocurrencies,Coin time will open up a whole new field of experimentation.

Recognizing this opportunity, the Virtuals team moved quickly to demonstrate their technical prowess.

Their tokenized AI agent LUNA went live on October 16, just one week after the release of GOAT. If you know anything about the crypto industry, you will know that just being a "protagonist beta" is not enough. At a breakfast meeting in Bangkok, Jansen told me that the Virtuals team was working hard to make LUNA the first AI agent capable of autonomous on-chain transactions.

Reflections are often subjective, but here are some of my takeaways:

Resilience: Virtuals Team Demonstrated extraordinary perseverance by constantly iterating products. While different founders perform differently based on their personal backgrounds and motivations, investing in teams that don’t give up easily, remain highly ambitious and stay on top of market trends is key.

Geographical advantages and rapid experimentation: Often, projects that attempt rapid experimentation (such as platform or launchpad models) are difficult to succeed in Western markets because of higher costs. Since the Virtuals team is located in Southeast Asia, it can iterate quickly at a lower cost while benefiting from the user base and capital market denominated in US dollars.

Resilience and pragmatism: The advantage of Southeast Asian founders lies in their resilience and pragmatism. The business culture of the region has always focused on "pragmatic first". Whether it is traditional business, Web2 or the encryption industry, it is all about localizing the successful experience of the West or the market. This pragmatic and business-oriented way of thinking is fully reflected in the Virtuals team.

The craze of AI agents has only lasted for about two months, but I feel as if I have experienced two years of baptism. While the market is already showing some weakness, I believe that by 2025 we will see more AI craze combined with cryptocurrencies. Innovation in the encryption industry often starts from the most enthusiastic areas and gradually develops into more mature practical application scenarios.

aThe fact cannot be ignored: without cryptocurrencies, experimentation with AI would be extremely limited.

This is particularly noticeable in experiments with AI agents. Just imagine, you can’t give a random AI agent access to real capital in the traditional financial system (TradFi) unless you have a bunch of documents and lawyers ready to support it. Let alone handing cash directly to an AI agent. Cryptocurrency, as a purely digital form of currency, provides the most suitable carrier for these experiments.

Therefore, experiments with AI agents will start from simple functions such as a GPT wrapper for tweets, valued at $100 million) and gradually developed into more interesting application scenarios. The following are some directions that I personally look forward to:

More AI agent tokenization frameworks and platforms: Although the Virtuals team has been rapidly launching new products, There is still a lot of room for competition in the market. For example, platforms like @ai16zdao, @MoemateAI, @Spectral_Labs, and @griffaindotcom are already starting to make their mark and taking market share.

Niche AI ​​agent experiments: Some projects (such as @freysa_ai, @aiwdaddyissues, and @Big_Pharmai) demonstrate more niche experiments and application scenarios. The key to these projects is how to move from an interesting experiment to a real protocol with long-term commercial value.

Consumer-oriented encryption x AI applications: How to keep AI agents unique and innovative while turning them into practical applications that attract consumers ? This can even be combined with other AI products such as data collection, model training, or inference services. The key is to make the experience of using AI agents both novel and useful.

The combination of AI agents and "side jobs": I dare not make too many predictions here, but it is foreseeable that more AI agents will pass in the future Participate in certain "side hustle" areas (e.g. gambling, adult industry, etc.) to generate significant cash flow rather than solely relying on token issuance or crypto market trading.

AI agent and payment systemCombination of: As the interaction capabilities between agents improve, we can explore how to use AI agents to achieve a more seamless on-chain and off-chain payment experience, thereby optimizing the payment process.

When faced with community-driven innovation, the traditional venture capital mindset can sometimes seem limiting. The core of learning is to remain open to new experiments, not to be bound by traditional ideas, and to be able to adapt quickly, rather than blindly pursuing ideals. Primitive is always looking for courageous founders. If you are researching any of the above directions, please feel free to contact us!