The total market capitalization at launch equals OpenAI's valuation. Can Worldcoin's narrative support the price?

Author: Loopy Lu, Planet Daily Odaily

Yesterday, Worldcoin previewed an upcoming "major event." Just one day later, this highly anticipated project finally announced its token launch.

At the opening of several CEXs, the WLD token briefly traded at around $1, followed by a rapid surge. According to Bitget, WLD peaked at $4.7, with an increase of over 1000%. Coingecko data shows that the current WLD price fluctuates around $1.95.

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

With the added hype, its NFTs have also seen significant price increases. Opensea data shows that in the past week, the floor price of the Worldcoin commemorative NFT "Introducing World App" rose from 0.0067 ETH to a peak of 0.0265 ETH, a maximum increase of 295%, with the current floor price reported at 0.017 ETH; in the past week, NFT sales reached 1,097, with a trading volume of 18.64 ETH, totaling 268 ETH in transactions.

The cryptocurrency market has not seen significant breakthroughs in recent weeks, nor any standout hot topics, with only a few meme coins gaining popularity. In this context, the backing of Worldcoin's team and investors, along with its grand narrative, has made it the market's focal point, with exchanges scrambling to list the token and investors eager to participate. However, the controversies surrounding it have always been numerous, and the token model raises doubts about its price support.

Rare Airdrops, Concentrated Holdings: A Pie or a Trap?

Earlier today, before the official "announcement" of the token launch, OKX had already announced it would start accepting WLD token deposits, solidifying market expectations for Worldcoin's token release.

Shortly after, several exchanges, including Binance, followed suit with this hot project. The scene of multiple exchanges competing for the WLD token has not been seen in the crypto market for quite some time. Can the market's high expectations for this project ignite trading enthusiasm? With such high hype, where will the price of the WLD token go?

The initial airdrop rules announced by the official team indicated that approximately 2 million early users who registered for Worldcoin during the testing phase (i.e., those who submitted their iris data and generated a World ID) would receive an airdrop of 25 WLD tokens. Worldcoin promised to accelerate registration by deploying The Orb in over 35 cities across 20 countries worldwide, with regular rewards to follow.

However, this airdrop rule has sparked dissatisfaction within the community. Since World ID requires offline iris scanning, the vast majority of investors are unable to participate in the verification process. As a result, the commemorative NFTs issued twice by Worldcoin have been considered by the community as an alternative for "early participation."

Dune data shows that the first commemorative NFT had over 58,000 unique holders. The number of addresses holding the commemorative NFT issued on the Optimistic network is even higher, exceeding 1.6 million. However, Worldcoin did not airdrop tokens to these NFT holders, leading to anger and dissatisfaction regarding the airdrop rules.

Just a few hours later, the official team promptly launched the Genesis Grant round airdrop. In this round, addresses that had not submitted iris data could also receive airdrop rewards.

The Genesis Grant round is open from July 24 to July 31. Unverified iris users can pre-claim 25 WLD, which will be held for 365 days. Pre-claiming users can transfer WLD after completing iris verification. It is still unclear how many accounts meet the requirements for this airdrop.

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

However, the distribution of holdings is highly centralized. WLD is deployed on both the Ethereum mainnet and the Optimistic chain. For example, on the Optimistic chain, holding more than 100 tokens places an address in the top 30.

On-chain analysts have provided even more precise data. 0x Scope Protocol found that the top 9 addresses holding WLD tokens account for 99.135% of the total supply, suggesting they may be controlled by the project team. Additionally, some tokens have been transferred to Binance, OKX, and Bybit.

How Much WLD is Actually in Circulation?

In stark contrast to the mere 25 tokens for the airdrop is the massive supply and circulation of WLD.

Previously, Worldcoin had not disclosed the tokenomics of WLD, and even the details of the token launch were not revealed until now. The official documentation briefly mentioned that the total supply is 10 billion, with "less than 20% of the total tokens allocated for funding Orb production and protocol development, and 3% for ongoing ecosystem development and maintenance."

Around 3 PM today, the official team finally released a detailed token distribution plan. However, this detailed distribution plan differs slightly from previous disclosures.

The tokenomics indicate that the total supply cap for WLD is 10 billion, with 75% allocated to the Worldcoin community; 9.8% to the initial development team; 13.5% to Tools for Humanity investors; and the remaining 1.7% reserved for Tools for Humanity.

Additionally, the maximum circulating supply at the launch of WLD is 143 million. Of these, 43 million WLD will be allocated to users who verified their identity through The Orb during the project's pre-launch phase, and 100 million WLD will be loaned to market makers outside the United States. The distribution ratio of the 43 million tokens is as follows: Asia 32.1%, Africa 31.6%, Latin America 18.8%, Europe 17.1%, and other regions 0.1%.

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

It is worth noting that the distribution plan does not distinguish between ordinary users and operators. We cannot determine whether operators are "whales," nor do we know the proportion of tokens received by users of these two identities.

According to earlier introductory documents, the official stated that "most tokens will be allocated to users and operators. To incentivize user adoption, operators will receive token rewards for each user registration, and the rewards will decrease over time."

How Does Worldcoin Achieve Sam's Utopian Ideal?

Worldcoin was initiated by Sam Altman, the founder of OpenAI and former president of Y Combinator. With the rise of OpenAI, its unique iris recognition mechanism, and its recognizable physical devices, this project has been quite prominent this year.

Worldcoin's research found that 4.4 billion people worldwide still lack legal identity, making it difficult for them to access financial services due to the inability to verify their digital identity. Therefore, Worldcoin aims to provide a more accessible digital identity for all humanity. From a product perspective, Worldcoin has three main products.

• World ID: A digital identity that allows users to prove they are unique, real humans while remaining anonymous. This product uses zero-knowledge proofs (ZKP) to protect user privacy.
• Worldcoin Token: A token that is distributed for free to humans worldwide, which can be used for future governance.
• World App: A self-custodial wallet that allows users to use Worldcoin tokens, digital assets, stablecoins, and traditional currencies for payments, purchases, and transfers globally.

What is most idealistic about Worldcoin is its token distribution method. Worldcoin hopes to distribute cryptocurrency for free to every real human globally, allowing anyone to create an account by verifying their iris information and receive token rewards for free upon creation.

Interestingly, Sam is committed to realizing his grand UBI (Universal Basic Income) vision through this project. The UBI policy aims to provide everyone with a certain amount of money regularly, with the "basic income" covering a person's basic living needs, including food, housing, and healthcare. This income should be unconditional, fixed monthly, and not subject to specific restrictions or requirements.

Specifically, Sam aims to empower everyone with financial tools through Worldcoin, provide affordable energy for society using two nuclear fusion development companies, enhance social productivity with AI and robotics, and ultimately achieve human liberation—distributing UBI income to all humanity with Worldcoin, allowing those whose basic survival needs are met to engage in more valuable and creative endeavors.

However, beyond the grand narrative, many controversies have arisen. Previously, social media exposed instances of contractors collecting iris data from local villagers in Southeast Asia for $30 or less and selling personal crypto users off-market to assist with app registrations, targeting the massive token airdrop behind it.

Additionally, Worldcoin faces contradictions regarding regulatory intervention and data processing. Worldcoin operates a subsidiary in Germany, and according to GDPR principles, any data involving EU residents or operating within the EU is subject to EU regulations. However, Worldcoin's global operations conflict with EU regulations. For example, it claims that 1% of Portugal's population has become its users, but how it handles global data has not been adequately clarified. According to GDPR, "failure to adequately protect data may result in fines of up to 4% of global revenue or €20 million."

In terms of privacy and data management, Worldcoin's mechanism design is clearly not yet perfect.

Overvalued Listing: How Much Imagination Space is Left?

In October 2021, Worldcoin completed a $25 million Series A financing led by a16z, with a valuation of $1 billion, involving star investors such as DCG, Coinbase Ventures, and Multicoin.

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

In May of this year, Worldcoin announced the completion of a $115 million Series C financing, led by Blockchain Capital.

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

With a staggering $3 billion valuation, how much growth potential is left? It is challenging to make accurate predictions about Worldcoin's growth potential, but it is clear that if we use the current market price as a reference, a $3 billion valuation would place it among the top 30 cryptocurrencies by market cap, surpassing Monero and competing with BCH, AVAX, SHIB, UNI, and LINK within the $3 billion to $5 billion market cap range.

Currently, the airdropped tokens of Worldcoin have not been fully released, and market liquidity remains insufficient. Whether Worldcoin is a concept-supported, fleeting speculative target or can become a successful project that builds long-term towards its vision remains to be seen. We will continue to monitor Worldcoin and look forward to further reports.