The original text is from Marco Manoppo
Compiled by｜Odaily Planet Daily Golem (@web3golem)_
In a bull market, we are always bombarded with information about people successfully achieving 100x returns (like Hyperliquid), but we don't talk enough about missed opportunities. In this article, I reflect on my story with Virtuals Protocol, how I met the founders early on, and as a VC, how I missed it (which now seems to be my first 100x opportunity).
Note: The first 1000x opportunity I missed in my life was a seed round investment in Solana through an angel friend in 2019, but at that time, I was not yet a VC.
Virtuals is the biggest liquidity venture capital opportunity I missed in this cycle. The founders first contacted me at ETHCC in July, when their FDV was about $50 million. Before that, I had even heard about the project from mutual friends in the first quarter, when their valuation was lower. However, I did not expect that six months later, the AI agent tokenization platform would become the protagonist of the current crypto cycle.
The co-founders of Virtuals, Jansen and Wee Kee, indeed have remarkable courage.
I remember them tirelessly sharing information about Virtuals with investors and operators in the field. Since I spent most of my time in Southeast Asia (SEA), I heard from friends in the crypto industry about their rebranding from the PathDAO era and their story about AI agent tokenization.
Even in the face of a bear market and without any mainstream CEX listings, their unwavering commitment to the project is impressive. If faced with the same situation, many other founders would return LP funds or abandon their projects, but the Virtuals team persevered, and they are now stronger than ever.
What made me think Virtuals wouldn't succeed
Earlier this year, we saw a plethora of Crypto x AI projects attempting decentralized computing or reasoning. I probably don't need to mention how many of these projects are hollow gimmicks; most do not provide a real way for retail investors to participate. Of course, users can earn some airdrops by joining the network and running some computations, but nothing can excite the retail market more than GameFi or DeFi in terms of airdrops.
Initially, I thought Virtuals might collect unique data through some gamified approach, combined with consumer-centric applications to differentiate the user experience—perhaps even mixing in some "Ponzi economics." After all, data is still the cornerstone of any AI model; what better way to incentivize people to share unique data than with magical internet currency? Just like in the third season of "Westworld."
But it turns out that the cryptocurrency market is becoming increasingly complex and extreme (barbell). We skipped the aforementioned process and went straight into the asset issuance field—this is where the main product-market fit (PMF) of the crypto market lies.
And the Virtuals team, with their previous efforts, was fully capable of seizing this opportunity.
GOAT Opens the Era of AI Agent Tokenization
People often say that luck comes when you are well-prepared for opportunities.
The AI meme coin GOAT sparked a frenzy in the market for AI agent tokens, as it opened up the imagination of what could happen when AI agents can interact with some form of currency. While there are still many limitations regarding GOAT, such as whether there is some degree of human intervention, the most important thing is that GOAT made people believe that when AI agents combine with cryptocurrency, they will open up a whole new experimental world.
Realizing this opportunity, the Virtuals team knew they had to leverage their technology and act quickly.
The Virtuals team's tokenized AI agent LUNA was launched on October 16, about a week after GOAT's release. If you've been in the crypto industry long enough, you know that merely appearing as a "beta" before mainstream projects is far from enough. So at a breakfast meeting in Bangkok, Jansen told me that the Virtuals team was doing everything they could to make Luna the first AI agent capable of autonomously conducting on-chain transactions.
Summarizing Lessons for Success
Essentially, reflection is often subjective, but here are some insights I gained after missing this opportunity:
Resilience: The Virtuals team demonstrated extraordinary resilience through continuous iteration of various products. Different founders have different motivational structures based on their personal reasons and socio-economic backgrounds. Regardless of these factors, the key is to bet on teams that do not easily give up, maintain strong ambition, and always keep up with market trends.
Geographic Arbitrage and Rapid Experimentation: Typically, projects attempting rapid experimentation (more of a platform/launchpad model) find it difficult to succeed in Western markets due to high cost structures. However, Virtuals, located in Southeast Asia (SEA), can iterate quickly at a lower cost structure while also benefiting from a user base and capital markets priced in dollars.
Resilience and Business Priority: The advantage of Southeast Asian founders lies in their resilience. The region has always prioritized business, drawing on successful experiences from Western/Chinese markets, whether in traditional business, Web2, or crypto, and can localize effectively. The founders of Virtuals fully demonstrated this business-first mindset, not getting bogged down by ideology or technocracy. They know what they do not understand, what they lack, and what their moat is.
What Might Happen Next
The AI agent frenzy has lasted about two months, but I feel like I've aged two years. While the market has shown some signs of fatigue, I believe we will see an even crazier crypto x AI frenzy in 2025. The verticals of cryptocurrency always start from the most "degraded" corners and gradually evolve into more mature application scenarios.
One thing remains true → Without cryptocurrency, AI experiments will be severely limited.
This is most evident in AI agent experiments. Without mountains of paperwork and legal support, an ordinary AI agent cannot access real capital in the TradFi system. We cannot casually give an AI agent real cash, while cryptocurrency is the purest form of currency for digital intelligent life forms.
Therefore, AI agent experiments will evolve from a simple GPT wrapper that can only post tweets but is valued at over $100 million into more interesting use cases—personally, I hope to see the following:
More AI agent tokenization frameworks and platforms. While the Virtuals team has been launching new products, the market remains competitive. Other platforms, such as ai16z, MoemateAI, Spectral_Labs, griffain, etc., have emerged and captured a certain market share.
Niche AI agent experiments. Projects like freysa, Fi, and Big Pharmai indicate that we can explore more niche experiments and use cases, with the key being how to evolve from interesting experiments to legitimate protocols.
Consumer cryptocurrency x AI agents. How can we maintain the advantages and novelty of AI agents while packaging them in an appealing way as consumer applications? It could even merge with other AI products (like data, training, or reasoning)—the key is to keep the novelty of AI agents.
AI agents x vice (bad industries). I won't elaborate too much here, but we will see more AI agents creating significant cash flow by entering bad industries (gambling, adult industry, etc.) rather than just through their tokens or trading in the crypto market.
AI agents x payments. Advancing interactions between agents and how we use agents to unlock a more seamless off-chain and on-chain payment experience.
When it comes to community-driven projects, the VC mindset can sometimes be flawed. The key to breakthroughs is to always maintain an open mind towards new experiments, unbound by traditional norms, and to be flexible rather than idealistic.
Related Reading
VIRTUAL's Market Cap Reaches $3 Billion, What Stories Are AI Projects in the Ecosystem Telling?
Want to Strike Gold in the Virtuals Ecosystem? Here’s My Contribution
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