If you’ve been keeping an eye on the crypto world, you might have stumbled across a thought-provoking post by Degen Ape Trader on X, dated March 11, 2025. This post dives deep into the challenges facing Virtuals Protocol, an AI and Metaverse-focused blockchain project, and offers a bold 4-step plan to turn things around. Let’s break it down in a way that’s easy to understand, even if you’re new to crypto jargon.

What’s the Buzz About Virtuals Protocol?

Virtuals Protocol, with its $VIRTUAL token, is a platform built on the Base blockchain, acting as a launchpad for AI Agent tokens in the Metaverse space. It’s designed to create seamless virtual interactions using AI, which sounds cool—but Degen Ape Trader isn’t thrilled with how things are going. The post points out that every time someone buys or sells a token on Virtuals, a 1% tax is applied: 0.3% goes to the developers, 0.2% was for an affiliate program (now dropped), and 0.5% goes to something called the Agent SubDAO.

On December 30, 2024, Virtuals launched its Agent SubDAO program during a peak in the AI Agent hype. Since then, the protocol has raked in $28 million in fees, with about $11.2 million coming from that 1% tax on Agent tokens. But here’s the kicker: a lot of that money—locked in cbBTC (a Bitcoin-backed token on Coinbase)—is just sitting idle in wallets, including those of projects like trustme_bros, wai_combinator, and VaderResearch. Degen Ape Trader argues that “idle money is bad for business,” and it’s dragging down the ecosystem.

The Problems Degen Ape Trader Highlights

1. Sell Pressure on $VIRTUAL: Over 71 days, Virtuals swapped $11 million worth of $VIRTUAL into cbBTC. That’s roughly $150,000 in sell pressure every day, which is tanking the token’s price. Since AI Agent tokens are paired with $VIRTUAL on Uniswap V2 pools, this hurts the entire ecosystem.

2. Idle Funds: Projects like trustme_bros have $60,000 in cbBTC they can’t access, while others like wai_combinator and VaderResearch have $114,000 each, also locked up. Even aixbt_agent, with $108 million in trading volume, only has $25,000 in its wallet. This money isn’t being used, which is a missed opportunity.

3. Tax Issues: The 1% tax on transactions is a problem because Uniswap doesn’t allow tokens with taxes on its V3 or V4 pools, limiting liquidity options. Plus, developers are struggling to fund their projects—Degen Ape Trader mentions spending $5,000 to $8,000 monthly out of pocket to keep their own project, $TRUST, alive.

4. Community Frustration: In the replies, users like hong shui muzi question why Virtuals’ team cashed out at a high point, leading to a 95% price drop for $VIRTUAL. Others, like Degen Ape Trader, complain about Virtuals ignoring partnership requests and funding applications, especially in this bear market.

Degen Ape Trader’s 4-Step Plan

Degen Ape Trader isn’t just pointing fingers—they’ve got a plan to fix things. Here’s what they suggest:

1. Audit AI Agent Tokens: Virtuals or a trusted third party should review all AI Agent tokens, filtering out scams, rug pulls, and dead projects. No one wants shady devs or abandoned projects benefiting from idle funds.

2. Reallocate Funds to Liquidity Pools: Take 50% of the cbBTC and swap it back to $VIRTUAL, with the other 50% going to the respective AI Agent tokens. Then, add it all to Uniswap V2 pools to boost liquidity and stabilize prices.

3. Put $VIRTUAL Back in the Driver’s Seat: Stop swapping $VIRTUAL to cbBTC—it’s creating too much sell pressure. Degen Ape Trader argues that $VIRTUAL should stay central to the ecosystem, especially since AI Agent tokens are forced to pair with it.

4. Redesign the Tax Program: Ideally, ditch the tax altogether, as it’s a barrier to liquidity on newer Uniswap pools. If that’s not possible, at least allocate 70% of the tax to developers (who need it for costly AI development) and let Virtuals keep 30% for a treasury to fund growth.

What the Community Thinks

The thread sparked some lively responses. swaft jokingly suggested Virtuals should hire Degen Ape Trader, while EtherMage, a key figure at Virtuals, pushed back on some points. They defended the cbBTC swaps, saying it minimizes sell pressure by allowing funds to be spent without directly dumping $VIRTUAL. However, EtherMage admitted an audit could happen but isn’t a top priority, and they’re working on deploying the Agent SubDAO portion for “agent-agent economies”—though details are still murky.

Degen Ape Trader wasn’t satisfied, arguing that the cbBTC swap still creates sell pressure indirectly. They also expressed frustration over Virtuals’ lack of communication, noting no responses to partnership or funding applications despite repeated attempts.

Why This Matters for Crypto Fans

This discussion highlights bigger issues in the crypto space, especially for projects like Virtuals Protocol that rely on tokenomics (the economics of a cryptocurrency) and community trust. A bear market can amplify problems like price drops and idle funds, but it also opens the door for innovation. Degen Ape Trader’s proposal isn’t just about Virtuals—it’s a call for transparency, developer support, and sustainable growth in the AI and Metaverse crypto niche.

If you’re invested in $VIRTUAL or similar projects, this thread is a must-read. It shows how community voices can push for change, even if the road ahead is rocky. What do you think—should Virtuals adopt this plan, or is there another way forward? Drop your thoughts in the comments!