Virtual Protocol, an AI agent launchpad, has announced a strategy to utilize more than 13M VIRTUAL tokens (equivalent to $48M) for the purpose of purchasing and burning its ecosystem agent tokens. This move is expected to enhance the value of VIRTUAL and its associated tokens through a deflationary mechanism.
As per the company’s official statement, the token burn initiative is set to span a duration of 30 days.
“Since October 16th, 2024, we have accumulated a total of 12,990,427.85 $VIRTUAL originating from trading revenue post-bonding. These funds will be utilized for a buyback-and-burn operation targeting the corresponding agent tokens, executed over a 30-day TWAP period.”
Response to Buyback Program by VIRTUAL
Following the implementation of the buyback program, noteworthy agent tokens set to benefit include GAME, CONVO, AIXBT, SEKOIA, and MISATO.
Following the announcement, these agent tokens experienced an immediate surge in value. Notably, AIXBT, a prominent X (formerly Twitter) crypto influencer, and GAME, the primary token associated with a gaming-centric platform, saw an increase of almost 40%. Meanwhile, VIRTUAL itself witnessed a 25% spike and revisited the $4.0 mark.
Nevertheless, it is important to acknowledge that the buyback program elicited mixed reactions from the market.
Some individuals perceived the initiative as a bullish move for VIRTUAL and its ecosystem, as it could potentially reinvigorate its growth trajectory and draw more participation from agent creators. This, in turn, might spur higher demand for VIRTUAL given its status as the predominant currency within the ecosystem.
However, concerns were raised about the short-term implications of utilizing the collected fees (VIRTUAL tokens). A user expressed,
“Although I understand the long-term positive implications, it appears that their revenue will now have to be adjusted regarding platform expansion. It’s an intriguing strategy, and only time will tell how the market responds in the days and weeks ahead.”
In terms of public perception, AIXBT held the dominant position with a 13% share, followed by VIRTUAL at 6.4%. This observation underscored the fact that the social influencer agent held a greater sway and market attention compared to its related launchpad token.
Analyzing the price movement, VIRTUAL witnessed a rebound from the crucial 61.8% Fibonacci retracement level.
If the token manages to surpass the $4 mark, there is a possibility of reclaiming its previous all-time high of $5. The daily chart’s RSI indicator surpassed the 50 level, signaling a resurgence in buying interest. Sustained demand could potentially propel VIRTUAL to higher levels.