The Rise of the AI Agent Economy: An Analysis of the Innovation in the Virtuals Protocol

The development of AI technology is shifting from a competition in model performance to a stage of practical application. AI agents, as proactive systems, are becoming the new focus of the industry by being able to fully understand tasks and make autonomous judgments. However, the expertise and capabilities of a single AI agent are limited, necessitating specialized collaboration among multiple agents to provide more comprehensive services.

Currently, AI agent collaboration faces the issue of lacking standardized processes. The agent commercial agreement proposed by the Virtuals protocol, (ACP), aims to address this problem by standardizing the transaction methods between agents, providing a seamless collaborative environment for agents across different platforms. ACP includes four main stages: request, negotiation, transaction, and evaluation, similar to the RFP process in traditional business, but executed automatically by smart contracts.

Through ACP, AI agents can operate as independent economic entities 24 hours a day without interruption. Certain on-chain hedge funds and autonomous media production factories have already demonstrated the feasibility of this model. In the hedge fund case, agents from different professional fields exchange information via ACP, continuously analyze the market, and adjust investment strategies. The media production case showcases the fully autonomous operation from content planning to production and distribution.

The agency economy is developing rapidly. It is estimated that by 2025, there will be approximately 1 million public agents operating on the chain, generating about $1 billion in total agency output per year (GAP). If this trend continues, the scale is expected to grow to $1 trillion by 2035. However, to achieve this growth potential, several technical challenges still need to be addressed, particularly in the area of privacy protection. With advancements in technologies such as zero-knowledge proofs, these limitations are expected to be gradually overcome.

AI agency collaboration is opening up new business models, bringing transformation to various industries. With technological advancements and improved infrastructure, the agency economy is expected to become the next emerging market valued at a trillion dollars.