Base Loses Big as AI Agent Launchpad Virtuals Expands to Solana

The Great Solana Migration of 2024 continues in the new year, with more of crypto’s biggest apps expanding to Solana in search of users and activity.

Virtuals Protocol, a popular AI Agent launchpad on Coinbase’s Ethereum Layer-2, Base, has announced its move to Solana, alongside a Strategic $SOL reserve, builder grants, and an AI hackathon with support from the Solana Foundation.

Why does the Virtuals migration signal a key victory for Solana’s AI sector?

Virtuals Announces Move to Solana

On Jan 25, Virtuals Protocol announced its move to Solana. Highlighting the network’s speed, scalability, and vibrant community, Virtuals Protocol asserts that Solana is the perfect ecosystem to bring its vision to life.

Supporting the migration, Virtuals Protocol announced grants of $42k in $VIRTUAL tokens to emerging teams building on Solana and Base. Additionally, Virtuals will be hosting an AI hackathon in March 2025, with support and mentorship from the Solana Foundation.

While the Virtuals Protocol migration is a great acquisition for the Solana ecosystem, the expansion will democratize one of Base’s biggest applications, drawing attention and liquidity away from the ecosystem.

According to Messari’s 2024 DePIN X AI Research Report, Virtuals Protocol is one of the AI sector’s most valuable apps, generating over $340M in annualized revenue. Cross-referenced with DefiLlama data, Messari’s report suggests that Virtuals is Base’s second largest revenue generator behind Aerodrome.

Virtuall’s expansion could result in a significant portion of the protocol’s revenue and attention being redirected to Solana, signifying a critical blow to the Base ecosystem.

Solana’s AI Power Vacuum

By welcoming Virtuals Protocol, Solana asserts its dominance as the home of onchain AI. According to cookie.fun, a popular AI indexer and analytics platform, Solana leads all chains in both AI Agent market capitalization and mindshare.

Some of Base’s biggest AI Agents, like $AIXBT, have already bridged from Base to Solana via Wormhole in search of a wider audience and greater liquidity. With Virtuals Protocol joining Solana, the network’s dominance is only expected to grow.

TradFi giant Franklin Templeton shares this sentiment. A research report from the asset manager highlighted the biggest emerging trends in the AI Agent sector. Of the 10 mentioned assets, 7 were Solana-based, with the remaining 3 including both the Virtuals Protocol and $AIXBT.

DeepSeek Reveal Wrecks AI Market

AI tokens and stocks have been decimated this week by the launch of DeepSeek, a new open-source Chinese AI model. 

Early reports indicate that DeepSeek dramatically outperforms ChatGPT and other popular American AI models, despite the company only spending $5.5M in training costs. DeepSeek’s performance has sent shockwaves of fear throughout the tech industry, with investors questioning whether America’s AI sector is grossly overvalued.

However, the crypto community has argued that more efficient and more powerful AI models will only benefit the crypto space long-term. 

While Web2 AI competitors like OpenAI and Nvidia may lose market share to emerging AI startups, superior AI models will only springboard greater innovation and growth potential within the blockchain industry.

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