Worldcoin market maker returns coins, how to fill the gap of nearly 10 million WLD?

Original - Odaily

Author - Loopy

On October 24, Worldcoin, which has previously become popular in the entire crypto world for its biometric identification, will usher in an important historical moment - the market maker returns the currency.

According to Odaily statistics, based on current on-chain data estimates, market makers still need to purchase up to approximately 10 million WLD (from project parties or the market). The movement of a large number of tokens may have a significant impact on the market direction of WLD.

Low circulation, high control, highly controversial token economics

In the early days of the project, Worldcoin was highly anticipated for its grand narrative and vision that was very rich in pattern. Odaily once wroteInterpreting Worldcoins Utopian Vision: Airdropping Billions of People is Just the BeginningInterpret its projects.

However, after it went online, users and investors found that the project’s token distribution was unsatisfactory, which triggered many concerns.question。

The total supply of WLD is 10 billion, but the maximum initial circulation is 143 million. Among these more than 100 million tokens, up to 100 million WLD will be lent to market makers as loans for market making use.

This also exposes WLD to accusations of market control and market manipulation.

A few months later, the Worldcoin project ushered in a new time point - the expiration of the market making agreement. This incident may have a foreseeable and significant impact on the current flat WLD currency price.

When the market maker repays the loan, how can the balance of tens of millions of WLD be made up?

As mentioned above, according to the agreement reached between Worldcoin and 5 market makers, these 100 million WLD are only loans lent to the market makers.

Yesterday, the Worldcoin Foundation stated that its partnership with the market maker will expire on October 24. Although both parties agreed that the agreement would be renewed again until December 15 this year. But the number of market makers has been reduced to 75 million coins. For the remaining 25 million WLD tokens, the market maker needs to return them or purchase them directly as previously agreed.

According to the previous agreement, the price of WLD purchased this time will be calculated according to the following formula:Price per WLD = $ 2.00 + ($ 0.04 * X), ​​X equals number of tokens purchased divided by 1 million.Calculated according to this formula, in the most ideal situation, the market makers purchase price will be slightly higher than 2 US dollars, while the current WLD market price is only about 1.4 to 1.7 US dollars.

Undoubtedly, it is a more rational choice to directly return 25 million WLD tokens.

If WLD is returned directly, are the current market maker positions sufficient?

Odaily counts the on-chain positions of the five major market makers. The specific data are as follows:

The currency flow after CEX is recharged cannot be verified, so the CEX address is ignored. This article only speculates based on the assumption that CEX recharge tokens are all used for market making and will no longer be withdrawn.

Calculated based on this data, the five major market makers currently hold a total of 15,862,022 tokens. Compared with the 25 million WLDs that need to be returned, there is still a shortage of 9, 137, 978 WLDs, or about 9.14 million WLDs.If purchased from the market, these tokens would be worth over $14 million at current prices ($1.55).

Coingecko data shows that WLDs trading volume in the last 24 hours was US$50 million; even if the market makers buying occurred in these two days, the effect of US$14 million on WLD would be limited and would not have a major impact.

When WLD was released, exchanges were rushing to list the currency and investors were gearing up. However, there has always been a lot of controversy about it, and the tokens model also makes people doubt its price support. Odaily reminds all users to do data research and investment decisions to prevent unknown risks in advance.