# AgentFi Incentives

### Purpose of Emission Rewards

The protocol allocates emission rewards to incentivize the creation and support of high-quality, productive agents.

* **Competition Encouragement**: By rewarding the top agent pools, the protocol fosters competition among creators and communities to develop superior agents.
* **Quality and Productivity**: Incentivizing the best agents ensures that users have access to efficient and valuable AI services.

<figure><img src="/files/WikC4ajXXIkdAM86x820" alt=""><figcaption><p>Protocol Emission to Top 3 Liquidity Pools by TVL</p></figcaption></figure>

### Mechanism of Emission

* **Emission Allocation**:
  * Emissions are allocated to liquidity providers of agent tokens.
  * The allocation is weighted based on the size of the liquidity pool.
* **Eligibility**:
  * Only the top three agent liquidity pools receive emissions.
  * The possibility to include more pools can be decided through governance mechanisms.
* **Emission Schedule**:
  * The proposed emission for the first 12 months is 60,000,000 $VIRTUAL tokens, per governance proposal [here](https://gov.virtuals.io/proposal/114159049320088981416633051769497309098912685542870398419330790013517149477918).
* **Distribution to Liquidity Providers**:
  * Rewards are distributed proportionally to liquidity providers within the eligible pools.
  * This incentivizes participants to provide liquidity to the most successful agents.

### Benefits of the Emission Mechanism

* **Enhanced Liquidity**: Encourages more liquidity in top agent pools, improving market efficiency.
* **Agent Improvement**: Motivates creators to continuously improve their agents to remain competitive.
* **Ecosystem Growth**: Drives the overall growth and robustness of the Virtuals Protocol.


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