Detailed explanation of the Worldcoin whitepaper: How are WLD tokens distributed and released?
Original translation: Karen, Foresight News
Worldcoin announced today that the Worldcoin protocol, World ID, WLD token, and World App are now available globally (in regions where permitted by law). Subsequently, several exchanges including OKX, Bitget, and Binance have announced the listing of WLD.
Foresight News has compiled the token economic distribution and release model of Worldcoin for reference.
WLD Token Economic Distribution Model
Worldcoin (WLD) is an ERC-20 token on the Ethereum mainnet, and individuals can receive their user grants on the Optimism mainnet. Therefore, most WLD transactions may occur on the Optimism network. If needed, tokens can be bridged back to Ethereum via Optimism.
In the 15 years following the token launch, the initial maximum supply of Worldcoin is set at 10 billion tokens (enforced by the WLD smart contract). After 15 years, if users decide through governance to enable inflation, the maximum annual inflation rate will be 1.5%. The maximum circulating supply at the initial launch will be 143 million WLD tokens, including 43 million WLD allocated to users who verified with Orb during the project's Pre-Launch stage, and 100 million borrowed by market makers operating outside the United States (loan expires after 3 months).
The Worldcoin token economy model is as follows:
75% allocated to the Worldcoin community, with the majority of tokens going to users and a portion allocated to the ecosystem fund and network operations. The foundation will manage the distribution of these tokens according to its bylaws and authorize governance that progressively decentralizes token management decisions;
9.8% allocated to the initial development team, Tools for Humanity (TFH), and other service providers who took the initial steps in developing Worldcoin. TFH currently serves the Worldcoin Foundation and operates the World App; (chart and article have inconsistent distribution ratios)
13.5% allocated to Tools for Humanity investors. TFH investors provided funding for TFH to support the Worldcoin project during its multi-year pre-launch phase;
1.7% will be reserved as a reserve for TFH. After the launch, TFH will hold a reserve of 170 million WLD tokens. (The allocation ratio in the chart and the article is inconsistent)
It is worth noting that in 2021, Worldcoin announced a token allocation ratio of 20% to TFH and the initial development team, and the latest white paper has increased this allocation ratio to 25%. Worldcoin's explanation for this is that the responsible development and launch of the network is more complex and expensive than TFH initially expected.
Before Worldcoin achieves decentralization and self-sufficiency, the Worldcoin Foundation will support the Worldcoin ecosystem and primarily distribute community tokens to:
User grants (≥60%), including Genesis Grants (25 tokens), Welcome Grant incentives earned after verifying Orbs (1 WLD, decreasing over time), and regular grants, among others.
Network operations (≤10%), initially focusing on development incentives for Orb manufacturing, Orb operations, market operations support, bug bounty programs, etc. After the transition phase, it is expected that all operator rewards will be paid in WLD. During the transition phase, some operator rewards will be paid in USDC.
Ecosystem fund (≤5%), including protocol development, Orb development, standardization, auditing and certification, ecosystem grants, incentive programs, liquidity reserves, and foundation operations.
World Assets Ltd. has signed loan agreements with five market makers operating outside the United States. These five entities received loans of 100 million WLD each within 3 months of the token launch. At the end of the three months, each entity must repay its loan or can choose to purchase any amount of tokens, up to the loan amount received. The purchase price of WLD will be determined by the following formula: 2.00 + (0.04 * X), where X is the number of tokens purchased divided by one million.
Worldcoin Foundation has established an ideal token distribution goal, as shown in the following image:
WLD Release Model
The two most important points about the WLD release model are:
The team and investor tokens are locked upon release;
User-claimed tokens are not locked.
The initial maximum circulating supply during launch will be 143 million WLD tokens. Out of this, 43 million WLD tokens will be allocated to users who have verified through Orb during the project pre-launch phase, and 100 million will be lent to market makers operating outside the United States (the loan will expire after 3 months). Worldcoin states that the number of tokens allocated to users is expected to significantly increase during the release cycle as new and existing Orb-verified users will be eligible for a Genesis Grant of 25 WLD.
The image below shows the WLD unlocking schedule for the next 15 years. After that, the speed at which WLD tokens will be released to the Worldcoin community, through governance decisions, will depend on factors such as the growth rate of Worldcoin users.
Note: The image displays the earliest unlocking status for all tokens.
The unlocking schedule for tokens allocated to the community is enforced by four smart contracts. Tokens allocated to users and operators are not locked.
The table below shows the unlocking status of community tokens during each specified time period, with the same number of tokens being unlocked daily within each period.
Tokens allocated to TFH investors will be locked contractually for 12 months after these investors exercise their respective warrant rights and will then be unlocked on average daily over the following 24 months.
For the tokens allocated to the initial development team, the tokens allocated to previous and current team members will be locked for 12 months in a contractual manner after release, and then unlocked on a daily basis over the next 24 months.
The tokens allocated to the TFH reserve will also be locked in a contractual manner, for a period at least as long as the token lock-up period applicable to TFH investors and team members. The exact lock-up period will depend on the allocation time of these tokens.
WLD Utility and Allocation Objectives
Worldcoin states that its Pre-Launch phase will run from May 2021 to July 2023. During this period, over 2 million people across more than 30 different countries have verified their World ID on the Orb. Over 4,300 WLD tokens have been allocated to these users prior to the launch. At the launch, Worldcoin will mint additional Orbs up to 1,500 to meet the global demand for World ID.
The Worldcoin Foundation will manage the project and strive towards gradually decentralized governance and ecosystem, and supply most of the WLD tokens to participants of the Worldcoin protocol. The distributing entity of WLD tokens is a subsidiary of the Worldcoin Foundation, called World Assets Ltd.
Worldcoin states that WLD is designed as a utility token with governance properties, and the introduction of World ID paves the way for a "one person, one vote" mechanism, in addition to the traditional "one token, one vote" governance mechanism. These two mechanisms can be combined in various ways to achieve new forms of governance.
After token launch, the Worldcoin Foundation will seek proposals and collaborate with the community to discuss the interaction between World ID and WLD tokens in the Worldcoin governance model.
Other use cases include the possibility for users to choose to use WLD tokens to pay for certain operations in the World App or other wallet applications, make other payments (e.g., remittances, tipping artists, buying and selling goods and services). Worldcoin states that in the long term, WLD tokens can also be seen as a global store of value.
