The market value equals to the estimated value of OpenAI. Can the narrative of Worldcoin support its price?

Yesterday, Worldcoin teased the upcoming "big event." And just a day later, this highly anticipated project finally announced its launch.

At the opening of multiple CEXs, the WLD token briefly priced at around $1, and then experienced a brief rapid surge. According to Bitget market data, WLD reached a high of $4.7 in a short period of time, with a surge of over 1000%. Coingecko data shows that the current WLD price is fluctuating around $2.8.

With an initial circulation of 143 million and a total supply of 10 billion, WLD's market capitalization has reached $400 million based on circulating market value. When calculated by fully diluted valuation (FDV), the project is valued at around $28 billion. In May of this year, after completing a new round of financing, OpenAI was valued between $27 billion and $29 billion. Worldcoin's market value is now similar to that of OpenAI, a super-star project also founded by Sam Altman.

Under the influence of its popularity, Worldcoin's NFT also saw a significant increase. According to Opensea data, in the past week, the lowest price of Worldcoin's commemorative NFT "Introducing World App" rose from 0.0067 ETH to a maximum of 0.0265 ETH, a maximum increase of 295%. The current floor price is temporarily reported as 0.017 ETH. In the past week, the total NFT sales reached 1,097, with a trading volume of 18.64 ETH, and a total transaction value of 268 ETH.

In the past few weeks, the crypto market has not had any major breakthroughs or standout hotspots. Only a few MEME games driven by existing tokens have become popular. In this situation, Worldcoin's team, the background endorsement of its investors, and its grand narrative have made it a short-term focus in the market. Exchanges are rushing to list it, and investors are eager to participate. However, it has always been controversial, and doubts have been raised about the token's model and its price support.

Rare airdrops and concentrated holdings: a pie or a trap?

As of noon today, there has been no official "announcement" about the launch.

Before the launch of the currency, OKX announced that it would start accepting WLD token deposits, confirming market expectations for the release of Worldcoin. Later on, several exchanges, including Binance, followed suit and joined in on the hype. This intense competition for WLD tokens among multiple exchanges is a rare sight in the crypto market. With such high expectations for this project, will it ignite trading enthusiasm in the market? With the support of this hype, what direction will the price of WLD tokens take? According to the initial official airdrop rules, early users who registered Worldcoin (i.e. input iris data and generated a World ID) during the testing phase will receive airdropped WLD tokens, with about 2 million tokens to be distributed. Worldcoin promises to accelerate registration speed by deploying The Orb in more than 35 cities across 20 countries, and users will also receive regular rewards in the future. However, these airdrop rules have sparked dissatisfaction within the community. Due to the offline iris scanning requirement for the World ID, the majority of investors are unable to participate in the verification process. As a result, Worldcoin's commemorative NFTs, which have been issued twice, have been considered as alternative options for "early participation" by the community. According to Dune data, there are over 58,000 addresses holding the first batch of commemorative NFTs. The number of holding addresses for the commemorative NFTs issued on the Optimistic network is even higher, exceeding 1.6 million. However, Worldcoin did not distribute airdrops to NFT holders, causing anger and dissatisfaction among these holders. However, just a few hours later, the official team immediately launched the Genesis Grant airdrop, allowing addresses without iris data to also receive airdrop rewards. For more information, you can visit the source.k">The Genesis Grant round is open from July 24 to July 31. Unverified iris users can pre-claim 25 WLD, which will be reserved for 365 days. Pre-claimed users can withdraw WLD after completing iris verification. The exact number of accounts that meet the requirements for this airdrop is currently unknown.

On-chain data shows that WLD on the Optimistic chain is currently being distributed. As of the time of this article's publication, there are 98,000 holding addresses.

However, its currency distribution is highly centralized. WLD is deployed on both Ethereum mainnet and Optimistic, for example, on Optimistic, holding more than 100 tokens allows you to enter the top 30 holding addresses on the OP chain.

And the on-chain detectives also provided more accurate data. 0 x Scope Protocol monitoring found that the top 9 addresses holding WLD tokens accounted for 99.135% of the total, and it is speculated that they may be controlled by the project team. In addition, some tokens have been transferred to Binance, OKX, and Bybit.

How much WLD is in circulation?

In stark contrast to the airdrop of only 25 tokens, WLD has a large supply and circulation volume.

Previously, Worldcoin never disclosed the token economics of WLD, not even the issuance of the coin. It was only briefly mentioned in official documents that the total supply is 10 billion tokens, of which "less than 20% of the total token supply will be used to fund Orb production and protocol development, and 3% will be used for continuous ecosystem development and maintenance."

This afternoon, the official finally released the detailed token distribution plan. However, this detailed distribution plan differs slightly from the previous disclosure.

The token economics show that the total supply of WLD is capped at 10 billion tokens, of which 75% is allocated to the Worldcoin community; 9.8% is distributed to the initial development team; 13.5% is allocated to Tools for Humanity investors; and the remaining 1.7% will serve as reserves for Tools for Humanity. 

In addition, the maximum circulating supply of WLD at launch is 143 million tokens. Among them, 43 million WLD tokens will be allocated to users who have been verified by Orb during the pre-launch stage of the project, and 100 million WLD tokens will be loaned to market makers outside the United States. Of the 43 million tokens, the regional distribution is as follows: Asia 32.1%, Africa 31.6%, Latin America 18.8%, Europe 17.1%, and the remaining regions 0.1%.

The pre-launch phase is from May 2021 to July 2023. During this period, over 2 million people in more than 30 different countries verified their World ID on Orb.

It is worth noting that the allocation scheme is designed to differentiate between regular users and operators. We cannot determine whether operators are "big holders" or the exact proportion of tokens received by users with these two roles.

According to the earliest introduction documents, the official statement is that "the majority of tokens will be allocated to users and operators. As an incentive for user adoption, users will receive token rewards for each registered operator, with decreasing rewards over time."

How does Worldcoin realize Sam's utopian ideal?

Worldcoin is initiated by Sam Altman, the founder of OpenAI and former president of Y Combinator. Due to OpenAI's popularity, the unique iris recognition mechanism, and distinctive physical devices, this project has gained significant attention this year.

Worldcoin's research found that there are still 4.4 billion people worldwide who lack a legal identity, making it difficult for them to access financial services through digital identity verification. Therefore, Worldcoin aims to provide a more accessible digital identity for people worldwide. From a product perspective, Worldcoin has three main products.

World ID: A digital identity that allows users to prove themselves as unique individuals anonymously. This product uses zero-knowledge proofs (ZKP) to protect user privacy.

Worldcoin Token: Tokens distributed globally to humans for free, which can be used for future governance.

World App: A self-hosted wallet that allows users to make payments, purchases, and transfers globally using Worldcoin tokens, digital assets, stablecoins, and traditional currencies.

One of the most idealistic aspects of Worldcoin is its token distribution method. Worldcoin aims to distribute cryptocurrencies for free to every genuine human globally. Anyone can create an account by identifying their iris information and receive token rewards for free after the account is created.

Furthermore, Sam is committed to realizing his grand Universal Basic Income (UBI) vision through this project. UBI policy aims to provide a certain amount of money to every person on an ongoing basis, covering their basic needs such as food, housing, and healthcare. This income should be unconditional, fixed monthly, and not subject to specific restrictions or requirements.

Specifically, Sam is trying to empower everyone with financial tools through Worldcoin, provide cheap energy for society through two nuclear fusion development companies, improve social productivity through AI and robots, and ultimately achieve human liberation - distribute UBI income to all humans with Worldcoin, allowing humans whose basic survival needs are met to engage in more valuable and creative pursuits.

For more detailed design information about Worldcoin and Sam's grand vision, please refer to the article "Interpreting Worldcoin's Utopian Vision: Airdropping Billions of People is Just the Beginning" written by Odaily. This article will not be repeated here.

But beyond the grand story, there have also been many controversies. Several individuals on social media have exposed the phenomenon of contractors collecting local villagers' irises in Southeast Asia and selling them personally encrypted user information to complete app registrations for as low as $30, targeting the massive token airdrop behind it.

In addition, Worldcoin faces contradictions in regulatory intervention and data processing. Worldcoin operates a subsidiary in Germany, and according to the principles of the GDPR regulation, any data operation or involvement of EU residents is subject to EU regulation. However, there is a practical conflict between the global operation of Worldcoin and EU regulations. For example, it claims that 1% of the population of Portugal has become its users, but how to handle global data has not been fully clarified. According to GDPR, "failure to adequately protect data can result in fines of up to 4% of global revenue or €20 million".

In terms of privacy and data management, the mechanism design of Worldcoin is evidently still imperfect.

High valuation listing, how much room for imagination?

In October 2021, Worldcoin completed a $25 million Series A financing led by a16z with a valuation of $1 billion. Prominent capital including DCG, Coinbase Ventures, Multicoin, and others participated.

In 2022, Worldcoin received investments from institutions such as Andreessen Horowitz (a16z) with a valuation of up to $3 billion.

This May, Worldcoin announced the completion of a $115 million Series C financing round, led by Blockchain Capital.

For an unreleased project, a valuation of $3 billion is undoubtedly a behemoth. However, this may not necessarily be a good thing for secondary market investors.

With such a large-scale project valued at $3 billion, how much room for growth remains? We cannot accurately predict Worldcoin's growth potential, but it is clear that based on current market prices, a valuation of $3 billion would rank it 30th in terms of cryptocurrency market capitalization, surpassing Monero and belonging to the market value range of $3 billion to $5 billion, along with BCH, AVAX, SHIB, UNI, and LINK.

Currently, Worldcoin's airdropped tokens have not been fully released, and there is still limited market liquidity. Will Worldcoin be a concept-driven speculative target that is short-lived, or will it become a successful project that develops in line with its vision in the long term? Odaily will continue to follow Worldcoin closely, so please stay tuned for further updates.