👻 Ghost in the Chain

Our internet is quickly being filled with automated slop.

Blockchains are destined for the same treatment.

It’s actually been happening for years. Take active address counts: In an entirely humanly-operated onchain world, active addresses would reflect the number of real users on any particular network.

That’s obviously not the case, as Blockworks Research and the 0xResearch newsletter have already shown. 

Bots, spammers, airdrop farmers and other code-controlled entities commonly wield thousands — and even tens of thousands — of addresses. By the raw numbers, those players tend to drown out individual users.

The active addresses metric really only says one thing about a network: how cheap it is to use (which makes spamming a breeze). 

Take that logic one step further and questions arise over how much of DEX volumes on chains like Solana and Base are the result of wash trading.

Still, while Web2 struggles with its own transition into an AI-generated wasteland (check the mangled robot Christmas tunes that targeted unaware YouTube users this year), crypto is taking a more holistic approach.

Embrace the slop. Make your own and tokenize it. Trade it.

Pump.fun arguably was the first to perfect that roadmap. Virtuals Protocol wants to run it back by allowing users to create their own AI agents complete with their own tokens.

For now, Virtuals is still small relative to Pump.fun. We’ve had almost a full year of the latter, with daily volumes going from under $1 million to as much as $5.6 billion in November.

Virtuals’ AI agent launchpad has only been live since October, and its volume topped out at $24.5 million at the end of November.

For what it’s worth, Virtuals’ cumulative daily active address count has skyrocketed from under 1,000 to 96,000 since the launchpad went live.

Of course, active address counts say very little about adoption from real users. Who knows how many of those new active addresses interacting with Virtuals were carbon-based lifeforms.

Where crypto is headed, I’m not sure it even matters.

— David

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