The Global South Crypto Cabal
I've written quite a bit on Virtuals.io and the projects they're investing in this bull run, namely $UEFN. Since my first article, the $UEFN floor has seen a 6x, and the narrative I've painted of this group as next up has only gotten more real.
Virtuals just had a successful "bootstrapping" raise on Blast for its AI girlfriend token $WAI, bringing another $6.4M USD into its collective coffers. This is on top of the $21M treasury the Virtuals main project has been overseeing since its PathDAO days.
What's most impressive is this cabal is cultivating an insular ecosystem that can sustain itself in extended bear markets and provide benefits in bull markets. It is also a group that learns quickly from its mistakes (although it still makes them, to be sure).
Most importantly for we humble investors, this is a group who's system hasn't seen its blow off top pump yet. There are anon memecoins and larp projects with 10x the market capitalization of the Virtuals cabal, meaning there's still a tonne of upside for investors who have yet to really take a look at what's going on here.
So let's take a look.
Willfully Under the Radar
Crypto has no shortage of anon devs or under the radar teams. Devs/teams that get that natural underground traction β Blue Kirby β don't have to actively seek the spotlight or even care to deliver timely updates for good marketing.
But the Virtuals cabal is a little weird in that respect. Blue Kirby at least marketed enough to get his token on Coingecko. Virtuals hasn't bothered. ($UEFN is, though; $WAI too early to tell; I'm writing this the day after the Fjord raise.) The Virtuals team is also quite doxxed; you can find their names and resumΓ©s in their docs for all to see.
Virtuals is also much more professional than a bipolar dev like Kirby. Kirby doesn't care if he releases garbage on mainnet just to test a concept ("test in prod"). The Virtuals team is quite meticulous in what they curate, as seen with $UEFN and $WAI. Not only are both projects serious, but they all gather around the same narrative of the AI agent.
Cornering a Market
AI agents will be big business in web2 and web3. Agents are literally Agent Smith from the Matrix before deplugging. Agents in our world take their cues from LLMs like ChatGPT (but hopefully not ChatGPT because it sucks; look to $ENQAI) and deliver those prompts to you not in text, but as an NPC in an RPG or as an AI girlfriend. The B2C implications are endless; don't even get me started on the infrastructure and B2B implications. Suffice it to say that if we ever reach a Skynet or Matrix 1 dystopia, AI agents will be the technology to bring it to us π. This concept is POWERFUL.
Everything Virtuals has put forth, from its main page description to the projects it backs, so far all center around the AI agent. Virtuals takes on the concept from a B2B perspective; AI agent as sales agent, for example. $UEFN recently pivoted to become an AI agent for UGC platform; AI agent as game asset. And $WAI brings you AI agent as digital girlfriend.
You got the business class, the gamers, the incels. That pretty much covers every XY chromosome on the planet. And web3 is a great place to start since all the guys here basically fit all three of these descriptors π€£.
The Competition
A doxxed team with a moat around web3 AI agents seems poised for web2 outreach. The team seems to knowingly insulate themselves from regulatory scrutiny as well: The $WAI raise was geoblocked from OFAC countries and Malaysia, which is weird unless you know the Virtuals team is based in Malaysia. [Rule #1 of good web3 business: Citizenship is a liability. Don't do business in your "home" country.]
There are web2 companies broaching the idea of AI agents, most of them with more money than the Virtuals cabal. But Virtuals has web3, the ability to raise copious amounts of money within web3, and a treasury that will grow exponentially faster than any web2 treasury during the next 12-18 months. It could legitimately 50x by 2025 with no effort needed from the team other than to hold.
The Treasury is an interesting piece as well. Not only will it multiply in the bull run, giving Virtuals more capital to compete in web2 spaces, but it solidifies the connection between Virtuals and the wider South Asian web3 market. PathDAO was a big part of holding the floor for many of these projects during the bear, and as Virtuals, they are set to reap the benefits of that loyalty in not only investors but also in consumers.
Learning from Mistakes
As PathDAO, the cabal had a great launch in the last bull run. They were the last of the great gaming DAOs to raise a significant amount ($17M) in that run, following YGG and Merit Circle. If you were smart, you could see the throughline β Merit Circle was one of PathDAO's strategic investors.
However, they faced criticism with a staking program that gave away tokens so quickly that the price tanked from $0.60 to $0.01 with virtually no relief.
Gradually, PathDAO implemented incentives that balanced the health of the protocol with the health of investor relations. But! Here's the kicker:
At no time was the PathDAO token ever less than fully backed by Treasury cash on hand. Even at its worst, the DAO kept enough stables to buy back all tokens 3x over. Irregardless of token price, this signals a healthy treasury. As bad as the chart looks, those who staked $PATH through its transition to $VIRTUAL are not at a fiat loss. They would also have a larger percentage of the project in their wallet, and a return to $0.60 would put the investment β 8x * percentage ownership increase.
The project did forget about its original NFT investors, however. That would wake a sleeping giant β to airdrop new project allocations to those still holding the original Path NFTs.
The Bottom Line
The Virtuals cabal is in a good place, and they haven't pumped yet. Not really.
They don't need big names like Animoca to raise capital, which leaves the door wide for a 100x buyout from companies like that.
This is a serious team that could transition into web2, not a schizo dev who gets traction from other schizos (Blue Kirby/Andre Cronje).
Most importantly, they have a clear vision of what they're doing, even if they don't spell it out to the TG every two days.
The Global South
The Virtuals cabal and their success speaks to a change in the world at large. The world is moving away from westernized definitions of success β destroy all opponents, competition, only one winner, the loudest guy in the room is the smartest, etc. Virtuals is quietly but definitively winning through values stemming from the Global South β cooperation with nearly every major Global South web3 project through its Treasury, focusing on its AI agents niche, allowing other teams outside of the core Virtuals team to win, and being relatively quiet about everything, at least to the general public.
An investment in Virtuals is an investment in these values and in the value coming from the Global South. A (hopefully profitable) breath of fresh air, honestly.
