Original Title: Virgenesis - The Playbook
Original Authors: @Defi0xJeff, @steak_studio Lead
Original Translation: Rhythm Little deep
Editor's Note: The article analyzes the strategies for veVIRTUAL staking and points games on the Virtuals platform. It introduces the latest tokenomics updates, emphasizes alignment of long-term stakers with protocol interests, and advises against locking all tokens to maintain liquidity. The author suggests earning 100,000 to 400,000 Virgen points daily, locking 10,000 to 50,000 $VIRTUAL, to flexibly respond to market fluctuations while selecting high-potential projects to maximize returns.
The following is the original content (reorganized for better readability):
This is a brief and concise article sharing my thoughts on veVIRTUAL staking and how to navigate the points game.
If you've been active in the trenches of Virtuals recently, you may have noticed that the team has just launched one of the most significant updates ever:
- Integrated Kaito, launched a comprehensive Yapper leaderboard, incentivizing top Yappers and Kaito stakers to earn points.
- Updated the tokenomics, introducing veVIRTUAL (20% of points are now allocated to veVIRTUAL stakers instead of holders).
The changes in tokenomics have aligned the interests of long-term supporters (those willing to lock $VIRTUAL) with the protocol (Virtuals and the proxy team). This new dynamic reminds me of the xGRAIL tokenomics (during the Arb season) and the ve(3,3) tokenomics that emerged with Velodrome and Aerodrome on OP and Base.
Since 2021, I have navigated various narratives and waves, and one lesson I've learned is that locking all your tokens to the maximum extent is very unwise in any situation (especially in veTokenomics models).
Why?
Looking at it from a broader perspective, the value of $VIRTUAL comes from trading fees generated by trading activity on its platform. The more projects launch, and the more existing projects innovate and introduce exciting features, the more people will be excited to trade on Virtuals.
Next is "Virgen points," which are essential for participating in the Genesis launch, earned by actively trading on Virtuals, holding/diamond-handing proxy tokens, and holding $VIRTUAL (before the latest changes). $BIOS became the top case, this hundredfold rising star continues to attract builders and traders into the Virgen trenches, solidifying the flywheel effect.
Virgen points have now been established as "digital gold," with each point valued between $0.012 and $0.034 (if you earn 100,000 points daily, assuming you invest points in successfully launched projects, you could earn $1,200 to $3,400 daily).
Now… the reason I say maximum locking is a bad idea is as follows:
No launch platform can be hot forever—trends and narratives ebb and flow like waves, influenced by various factors. The Virtuals team has shown they are masters of narrative, but in the face of competition, no one knows how long the current Virtuals wave can last.
There is a "sufficient" threshold for daily points earned (per wallet). For example, if you max lock 150,000 $VIRTUAL, you earn 150,000 veVIRTUAL, and earn 1.5 to 1.8 million points daily. Dude, you don't need that many points.
There are hidden liquidity costs. During a cycle, tokens can rise (or fall) significantly. When it is skyrocketing, if you cannot take profits, you cannot realize gains. Next, the token will drop because nothing is eternal. All good things must come to an end, and the key is whether you can extract maximum value from it.
Again, if you look at this table, you'll find that the returns on points spent are highly dependent on the quality of the projects you invest in, the hype surrounding the projects (how many points are being invested), and how high the FDV (fully diluted valuation) can rise after launch. Project selection is crucial in this game. The better you choose, the higher the value you can capture from points.
How much $VIRTUAL should be locked? What is the strategy?
Assume $AXR is the worst-case scenario (requiring 4 million points for full allocation), earning 400,000 points daily for a week to a week and a half should suffice. This is equivalent to locking 50,000 $VIRTUAL for two years.
Assume $WHIM is the baseline scenario (requiring 820,000 points for full allocation), earning 100,000 points daily should be enough. This is equivalent to locking 10,000 $VIRTUAL for two years.
The rule of thumb is to earn 100,000 to 400,000 points daily to ensure you have enough points to participate in medium to high hype launches within a week or a week and a half.
Whether to max lock part of $VIRTUAL or lock all $VIRTUAL for the medium term is up to you. But make sure to hold both liquid and illiquid assets to maintain flexibility and realize profits as $VIRTUAL continues to rise.
How do I play?
I only max lock a small portion (5-10%) of $VIRTUAL as veVIRTUAL to ensure I have enough points to obtain full allocations for high hype launches, keeping the remaining 95% liquid to realize profits when the market warms up.
Assuming I earn 250,000 points daily, I make decent decisions when selecting projects and exit at the right time, with each point valued at $0.022 = $5,500 daily -> I can break even in just 5 days.
If we assume the worst-case scenario of each point being $0.010, that would be $2,750 daily -> I would only need 9 days to break even.
I plan to only select projects with optimal point value for short-term operations while only diamond-handing tier one projects. The ultimate goal is to accumulate more $VIRTUAL, viewing the Genesis launch platform / Virgen points as a venue and mechanism for generating returns on $VIRTUAL tokens.
For those interested in my future selections, you can check out my latest Substack article "The After Hour EP.2," where I share my analysis of three upcoming investment projects.
Make sure you know what you're doing. Do the math before making decisions. Don't max lock all assets due to FOMO; that's the worst decision.
Remember, investing in Virtuals proxies is more like "trading" rather than investing in technology (at least for now); you are investing in micro-projects with very low market caps that have the potential for explosive growth.
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