3. Virtual Protocol: The Foundation of Olympus Finance
Olympus Finance is a DeFi protocol built on Base, a Layer 2 scaling solution for Ethereum, and utilizes the Virtual Protocol as the foundation for token issuance and AI agent operation. This strategic combination gives Olympus Finance an unparalleled advantage.
Virtual Protocol is a protocol specialized in the creation, tokenization, and operation of AI agents, with the following features:
Tokenization for Public Co-Ownership: One of the most innovative aspects of the Virtuals Protocol is the tokenization of AI agents, transforming them into publicly co-owned assets. While users can create agents for both personal and commercial use, the protocol is designed to encourage tokenization as a means to promote public co-ownership and broader community participation.
Permissionless and Border-Agnostic: Leveraging the permissionless nature of blockchain technology, the Virtuals Protocol enables seamless, global co-ownership of AI agents. This border-agnostic approach ensures that anyone, anywhere in the world, can participate in the ownership and development of these productive assets, removing traditional barriers to entry and fostering a truly global marketplace for AI agents.
Decentralization Through Capitalism: By utilizing capitalist incentives within a decentralized framework, Virtuals Protocol aims to distribute ownership and control of AI agents more equitably across society. This model not only enhances the financial inclusion of participants but also decentralizes power, ensuring that no single entity has outsized control over the future of these agents or the ecosystem.
Co-ownership of VIRTUAL Agents: Virtuals Protocol enables the decentralized co-ownership of AI agents, turning these agents into community-owned, revenue-generating assets. This model gives users a stake in the agent’s future, allowing them to participate in both governance and value creation. The process works as follows:
Minting and Tokenization: Every time a new AI agent is created, 1 billion tokens specific to that agent are minted. These tokens are then added to a liquidity pool, establishing a market for the agent’s ownership.
Governance and Ownership: Anyone who believes in the potential of the AI agent can buy these tokens, which serve as the agent’s governance tokens. Token holders can participate in key decisions about the agent’s development, behavior, and future upgrades, fostering a decentralized approach to AI management.
Value Transfer Between Stakeholders: The Virtuals Protocol facilitates seamless value transfer between the various stakeholders in the ecosystem, ensuring that all participants benefit from the agent’s success:
Revenue from Users: Real-world users (e.g., fans interacting with a Taylor Swift AI agent) pay for various services like concerts, merchandise, livestream gifting, or personalized interactions. This revenue goes to the application developers that monetises the AI agent like any standard consumer app.
AI Inference Costs: The app developers uses part of this revenue to cover the cost of AI inference services, ensuring the agent continues to function effectively in real time.
Revenue for the Agent: A portion of the revenue generated by the agent is funneled into the Agent’s Onchain Treasury, which collects funds for the agent’s future growth and operational costs.
Onchain Buyback and Burn: As revenue accumulates in the Onchain Treasury, a mechanism triggers periodic buybacks of the agent’s tokens (e.g., $SWIFT tokens for the Taylor Swift agent). These tokens are then burnt, reducing supply and driving up the price of the remaining tokens, thus increasing the agent’s overall market value.
Liquidity Pools and Value Growth: The agent’s tokens are paired with VIRTUAL tokens in a liquidity pool, linking the success of the agent directly to the value of the VIRTUAL token. As the agent generates more revenue and its tokens are burnt, both the agent’s token value and the underlying VIRTUAL token appreciate, benefiting all token holders.
Stakeholder Benefits: Investors in both the agent-specific tokens (e.g., $SWIFT) and the VIRTUAL token gain value as token scarcity increases and more revenue flows into the system. This creates a self-reinforcing value cycle, where users, creators, agencies, and token holders all share in the agent’s financial success.
Revenue for Buyback and Burn
Agent Usage Fees
Public API Access: All agents are accessible via a public API, allowing anyone to use them permissionlessly.
Per-Inference Cost: The cost per inference call is predetermined.
Payment Mechanism:
Users must pre-load $VIRTUAL tokens in their wallets.
Usage deducts $VIRTUAL tokens on a per-transaction basis, all conducted on-chain.
Revenue Flow
User Payments: When a user calls an agent via the API, $VIRTUAL tokens are deducted from the user's wallet and transferred to the agent's wallet.
Revenue Utilization:
The $VIRTUAL tokens collected in the agent's wallet are used to buy back the agent's tokens from the open market.
The bought-back agent tokens are then burned.
Deflationary Pressure:
Burning agent tokens reduces the total supply, creating deflationary pressure.
This mechanism can potentially increase the value of the remaining agent tokens.
And Base, inheriting the security and scalability of Ethereum, offers the following advantages as a Layer 2 solution:
Scalability and Low Cost: Base enables fast and low-cost transactions, significantly improving the user experience.
Security and Reliability: By coordinating with the Ethereum ecosystem, Base ensures high security and reliability.
Through the powerful combination of Virtual Protocol and Base, Olympus Finance creates the following synergies:
Leveraging AI Agents: The G.A.M.E Framework provided by Virtual Protocol makes it possible to integrate advanced AI agents into the DeFi protocol.
Efficient Token Economics: The token issuance function of Virtual Protocol and the low-cost transaction processing of Base enable the construction of efficient and sustainable token economics.
Excellent User Experience: The scalability of Base and the user-friendly interface of Virtual Protocol provide a seamless DeFi experience.
In this way, Olympus Finance aims to maximize the potential of DeFi by promoting the introduction of innovative AI agents, using Virtual Protocol and Base as its foundation.
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