jakiro
Source: Daoshuo Blockchain
AI agents are a track I am very optimistic about in this round of market.Although the entire track is now silent for various reasons, there are still many projects in the track that are still being built and improved.
Virtual is one of them.
In this article, I try to analyze the investment value of Virtual from a financial perspective.
As I wrote in the previous article, in the current crypto track, information about the financial status of the project is very lacking.Virtual is no exception.What’s more, the entire AI agent track has just appeared, and information in this area has become even scarce.
There are two pieces of information that I can find online that are of certain reference value:
The first is the financial information published by the Virtual team on its Twitter on December 31 last year (https://x.com/virtuals_io/status/1874111116403761316).
This information revealed that the Virtual project’s annualized revenue was $300 million.The definition of “revenue” is unclear, I guess it is income.Since we cannot find further data, we temporarily use “income” to estimate.
The second article is a news released on tradingview at the end of February this year (https://www.tradingview.com/news/todayq:1af82f429094b:0-virtual-protocol-revenue-drops-97-as-ai-agent-demand-declines/).
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 future free cash flow.To estimate future free cash flow, we can only rely on existing free cash flow to predict and linear extrapolate.However, the information at hand cannot calculate the current free cash flow at all.So, here we can only barely use “income” instead of free cash flow for estimation.
December last year was the rushing period of the AI agent track, so the first information above showed that the annualized revenue of US$300 million was its peak.
At the end of February this year, it was considered the low period for AI agents, with daily income of US$35,000, which was converted into annualized income of US$13 million.
I still use 12 as the estimate of “future PE”.Then Virtual’s “intrinsic value” is about US$160 million to US$3.6 billion.
From this estimation process, we can see that there is a considerable gap between optimistic valuations and pessimistic valuations of its intrinsic value.
The biggest reason for this gap is the uncertainty in the future development of the project.This uncertainty can be further decomposed into two aspects:
First, what will happen to the future development of the “AI Agent + Crypto” track?
The second is the future positioning and development of Virtual in this track.
Regarding the first point, I have always been optimistic about its future development, but what is uncertain is whether the future application scenarios and business models of this track are the scenarios and models we see today.
In the Web 3 ecosystem, the current situation of this track is obviously not very good.
But if we jump out of the encryption ecosystem and look at the broader AI track, we will find that there are very few application projects that have really found a good business model, whether it is Web 2 or Web 3.Even top projects like OpenAI are currently lacking in commercialization, and their subscription fee income cannot support their operations.
Among all AI companies, Nvidia, which is just an infrastructure supplier, has a good business model.
So this is probably not just a problem with the encryption ecosystem, but a problem with the entire AI track.
Regarding the second point, among the many AI + Crypto projects at present, Virtual is one of the few that I have seen that are profitable.No matter how cool the scenes described by most other projects are or how advanced the display technology, they still cannot see obvious profits, let alone boldly disclose their revenue status.
So in the current AI + Crypto track, Virtual’s future revenue situation is very uncertain, but looking around the entire track, I can’t see several projects with better certainty than it.
We have estimated the intrinsic value of Virtual very roughly, and we will look at its “price”.Here we can only look at its tokens.
Regarding the judgment of project token value, I have expressed my views in several previous articles:
The value of simple governance tokens is extremely limited. Only when it becomes a token with real equity value or an essential “commodity” for projects can such tokens be valuable.
In this regard, Virtual clearly stated that it hopes to develop tokens into daily currency in AI agent “countries” in the future, and has been implementing similar practices in its operational practice.
Whether this goal can be achieved can only be proved by time, but this approach to working towards “practical” is correct.So at this point, it is much better than many long-established projects.
Finally, let’s judge whether the current token price is overvalued.
As of the time of writing, Virtual’s full circulation market value was US$580 million.If we calculate it based on the lower limit of “intrinsic value” of US$160 million, it will definitely be overestimated.So I won’t buy it anymore.But I am willing to give it a little more patience for such a track and such a project, so I will keep the token I hold.
