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In May 2023, due to the strong connection with OpenAI, WLD (Worldcoin) came into our sight. We collected a lot of relevant information and compiled it into a research report! Of course, we will not make a specific research report today; after experiencing a large roller coaster, we plan to combine the data statistics at that time and the recent progress of Worldcoin to give our understanding.
Project Overview
Worldcoin is a free token distribution project that uses blockchain, biology, statistics and other technologies. It is a concrete manifestation of UBI (Universal Basic Income) economics. Worldcoin coordinates the interests of all participants and is committed to achieving widespread adoption by allocating most tokens to new users as an incentive to join the network.
Sam Altman, the founder of Open Ai, is the co-founder of Worldcoin. Perhaps both Ai and Worldcoin are the embodiment of his vision of the future world.
Team and investment and financing history
The project's founding team members include Open AI's CEO Sam Altman. WLD's historical performance is often highly correlated with ChatGPT's movements and Altman's remarks.
Alex Blania worked as a researcher at California Institute of Technology from 2019 to 2020; from 2020 to present, he serves as CEO and co-founder of Tools for Humanity, the operating company of Worldcoin.
Sam Altman Sam Altman is the founder and CEO of OpenAI, co-founder of Worldcoin, and president of Y Combinator from 2014 to 2019.
In terms of investment and financing, Worldcoin has gone through three rounds of financing. Investors include A16Z, Coinbase Ventures, DCG and other top investment institutions in the industry. The total financing amount is US$240 million, and the latest round of financing valuation is US$3 billion.
WLD (Worldcoin) investment and financing history
Market data performance
Let’s take a look at the performance of Woldcoin market data
WLD & BTC price linkage comparison Source: TradingView
The current price of WLD is 2.227, with a market capitalization of US$550 million and a FDV of US$22.2 billion. The price of the coin has fallen by more than 80% from its highest point of 11.72, and has fallen by 53% in the past month. Its performance is not only far worse than BTC, but also worse than most altcoins.
WLD holdings price distribution Source:Dune(Killer_whales_dao_levilin2008)
On-chain data shows that a large number of chips are distributed between 2.3-2.5, and there are also a large number of locked-in chips above $6.6. According to the current price, most addresses on the chain are in a floating loss state. The price faces great resistance to an upward breakthrough, but there is strong support at the current position in the short term.
Large-scale unlocking increases the pressure of market crash
Token Economics Distribution Model
Community 75%: Most of these tokens will be distributed to users; some tokens will be used for ecosystem funds and network operations, and the Worldcoin Foundation will be responsible for governance decisions in accordance with its corporate charter and gradually decentralized.
Initial development team 9.8%: Provide services to the Worldcoin Foundation and operate the World App.
TFH Investors 13.5%: TFH Investors provide funding that enables TFH to support the project. In particular, TFH develops the biometric imaging device, the first version of the protocol and the world application, as well as the first wallet of the ecosystem.
Reserve 1.7%: used to meet the future needs of TFH.
WLD token distribution model Source: Wolrdcoin white paper compilation
Token circulation and unlocking supply plan
To facilitate the scale that Worldcoin will achieve in the next few years, the Worldcoin Community will likely need a large amount of tokens, probably within the first few years after launch. This is why the 4.0B WLD of community tokens are unlocked within the first three years. However, the rate at which these tokens enter the circulating supply is controlled by governance, depending on how fast the network grows.
TFH Investor Tokens: Tokens allocated to TFH investors will be contractually locked for 12 months upon the exercise of their respective token warrants by such investors and then unlocked evenly on a daily basis over the next 24 months.
Initial Development Team Tokens: Tokens that have been allocated to past and current team members will be contractually locked for 12 months after launch and then unlocked evenly daily over the next 24 months.
TFH Reserve: Tokens allocated to the TFH Reserve will be contractually locked for at least as long as the lock-up period applicable to TFH investors and team members. The exact lock-up period will depend on when these tokens are allocated.
WLD unlocks the supply curve Source: Wolrdcoin white paper compilation
The total issuance of WLD tokens is 10 billion, and the current circulation accounts for only 16% of the total tokens. A large number of tokens are still in the unlocking state. Currently, the main unlocked tokens are owned by the community, with a daily unlocking volume of 3.2 million. According to the current price, it is about US$7.13 million, accounting for 1.29% of the total circulating market value.
Source:token.unlocks
According to token.unlocks, WLD will face a larger daily token unlocking after June 24, totaling 6.62 million tokens, which is $16.28 million at market price, accounting for about 10% of the past 24h trading volume. The unlocking volume of $16 million is even higher than Solana. Considering that WLD's circulating market value is less than 1/100 of Solana and its trading volume is less than 1/10, such a huge amount of token unlocking can be said to be huge. Under the premise of lack of market liquidity, facing such a large selling pressure, it is completely expected that the price will break through one dollar. At present, there are voices in the community calling for changes to the unlocking rules, but the possibility of realization should be small.
Source:CoinGecko
The price of the coin once rose to a high of $11.72 due to the previous AI craze, but since the token itself has no actual use scenarios and a large number of tokens to be unlocked, the price of the coin has been falling since the heat dissipated. It has now dropped to around $2 and there is no sign of stopping the decline. If the subsequent unlocking of 7.6 million per day (the next unlocking time is July 24, 2024) is realized, it is completely foreseeable that the price of the coin will break through one dollar.
On-chain data is worrying
Source:Coincarp.com
According to the data from Cryptorank, the top 10 addresses of WLD account for 91.19%, and the top 100 addresses account for 99.15%. Affected by the proportion of community tokens and investor allocation, the token distribution is very concentrated, with obvious characteristics of strong control, and the currency price is likely to be manipulated.
WLD (Worldcoin) new / active address changes Source: IntoTheBlock
WLD (Worldcoin) active addresses and price fluctuations Source: IntoTheBlock
According to IntoTheBlock data, due to the continued low popularity of the coin price, the on-chain activity of WLD has dropped significantly. The number of active addresses on the chain has dropped by more than half compared with the previous month, and the lowest active address rate is only 2.5%, indicating that users lack continued attraction to WLD due to the lack of speculative opportunities.
AI track narratives generally cool
Similar to the situation of WLD, most AI concept tokens have generally experienced a decline of more than 30% in the past month. The previously popular AI concepts (computing services, AI computers, etc.) could not be implemented, and the projects themselves could not even generate enough business income to maintain their own operations, let alone feedback to investors. With no one willing to take over, the coin price fell all the way.
Taking the previously popular computing service platform io.net as an example, the actual GPU utilization rate is very low, a large amount of resources are idle, the circulating market value is US$200 million, the FDV is more than 2 billion, and the average daily network income is less than US$500. Even such data is already relatively advanced among the many AI tracks, which shows the severity of the bubble in the entire track.
WLD is a public welfare project without a self-consistent business model. It relies heavily on the popularity of AI and the strong appeal of Sam Altman himself. The concept of public welfare + crypto does look impressive at first glance, but past experience has repeatedly proved that non-financial applications are basically not feasible in the field of encryption, and the long-term future of WLD is not optimistic.
Summarize
WorldCoin's UBI vision is grand, but its investors in the crypto space are not its target audience. Due to its special connection with OpenAI, the new GPT release may boost the price of WLD to a certain extent, but under the multiple negative effects of the overall lack of liquidity in the cryptocurrency circle + WLD's continued unlocking and weak narrative, its price still has a very large downward space.
Since the current market price has already reflected the negative impact of unlocking, the price may remain at a certain level in the short term, but in the long run, if the project party does not take positive measures or the external market environment does not improve, it is entirely possible for WLD to break 1.
