Palio is an AI-native Web3 simulation game where players nurture and interact with emotionally aware digital companions in a vibrant 2D fantasy world. Crafted by Xterio, each Palio is an AI-driven NPC with unique personality traits and emotional depth. Players manage shops, craft items, undertake dungeon quests, and engage in social experiences like guilds and AI conversations. Palio blends gameplay and game-fi mechanics with on-chain ownership and NFTs, offering immersive emotional bonds and economic interactivity—all while enabling community creation and future extensions in the evolving Xterio universe.