Virtuals Protocol, an AI agent platform, has seen a precipitous drop in daily revenue. Revenue fell from $1.58 million on January 2 to just $21,927 on January 21.
This sharp drop of almost 99% has raised eyebrows in the crypto community, and speculation is growing about its underlying causes.
Is Meme Coin Mania responsible for the drop in virtual revenue?
According to data from Dune Analytics, Virtual Protocol’s daily trading revenue has fallen since peaking on January 2.
One of the significant factors behind the decline in revenue appears to be the rise of meme coins, particularly the TRUMP and MELANIA tokens. They dominated the market last week.
As these tokens gained traction, they drained liquidity from other sectors, including AI agent markets. This even led to a 10% decrease in the market capitalization of AI tokens on January 20.
The rise in popularity of TRUMP and MELANIA coins, driven heavily by social media buzz, has caused a shift in investor focus. As the new meme coins began to gain traction, capital was reallocated to chase away the hype surrounding these tokens.
Additionally, a user on X (Twitter) weighed in on the situation, suggesting that Virtuals Protocol’s sudden revenue decline could be attributed to “value dilution.” They pointed out that with many projects launching in such a short period of time, attention was spread too thin.
“Do you think this is a dilution of value because so many people/projects/things have been launched in such a short period of time? The main driver of value is attention, but if it’s spread so thin over too many things…nothing gets enough attention,” they tweeted.
The theory makes sense in the crypto market, where attention is often more powerful than a project’s fundamentals. Additionally, meme coins tend to overshadow more stable projects as the market focuses on the latest viral token.
Virtuals Protocol, which has attracted considerable interest, now faces the challenge of recovering from the sharp loss of daily revenue. The protocol will soon have to regain its footing. It must either attract new users or drive away those who have been swept up in the coin frenzy.
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