How will Worldcoin market makers fill the nearly 10 million WLD gap?

Author: Loopy, Odaily Planet Daily

On October 24, Worldcoin, which previously gained fame in the entire crypto world due to biometric recognition, will迎来一次重要的历史时刻------做市商还币。

According to statistics from Odaily Planet Daily, based on current on-chain data estimates, market makers still need to procure up to approximately 10 million WLD from the project party or the market. The large fluctuation of tokens may have a significant impact on the market direction of WLD.

Low Circulation, High Control, and Highly Controversial Token Economics

In the early stages of the project, Worldcoin was highly anticipated due to its grand narrative and vision. Odaily Planet Daily previously published an article “Interpreting Worldcoin's Utopian Vision: Airdropping Billions is Just the Beginning” to interpret its project.

However, after its launch, users and many investors found that the token distribution of this project was unsatisfactory, leading to many questions.

The total supply of WLD is 1 billion tokens, but the initial circulation was a maximum of 143 million tokens. Among these over 100 million tokens, as many as 100 million WLD will be loaned to market makers for their market-making activities.

This has also led to accusations of market control and manipulation against WLD.

A few months later, the Worldcoin project faced a new milestone—the expiration of the market-making agreement. This event may have a predictable significant impact on the currently subdued price of WLD.

Market Makers Returning Loans, How to Make Up for the Shortfall of Millions of WLD?

As mentioned earlier, according to the agreement reached between Worldcoin and five market makers, these 100 million WLD are merely loans to the market makers.

Yesterday, the Worldcoin Foundation announced that the cooperation with market makers will expire on October 24. Although both parties agreed to renew the agreement until December 15 of this year, the amount of tokens to be made has been reduced to 75 million. The remaining 25 million WLD tokens must be returned by the market makers or purchased directly as previously agreed.

According to the prior agreement, the price for purchasing WLD will be calculated using the following formula: Price per WLD = $2.00 + ($0.04 * X), where X equals the "number of tokens purchased" divided by "1 million." Based on this formula, in the best-case scenario, the purchase price for market makers will be slightly above $2, while the current market price of WLD is only about $1.4 to $1.7.

Undoubtedly, directly returning 25 million WLD tokens is a more rational choice.

If they return WLD directly, do the market makers currently have sufficient holdings?

Odaily Planet Daily has compiled the on-chain holdings of the five major market makers, with the specific data as follows:

The flow of tokens after CEX deposits is untraceable, so CEX addresses are ignored. This article only speculates based on the assumption that "all tokens deposited in CEX are used for market making and not withdrawn."

Based on this data, the five major market makers currently hold a total of 15,862,022 tokens. Compared to the 25 million WLD that need to be returned, there is still a shortfall of 9,137,978 WLD, approximately 914,000 tokens. If purchased from the market at the current price ($1.55), these tokens would be worth over $14 million.

Coingecko data shows that the recent 24-hour trading volume of WLD was $50 million; even if market makers buy in the next two days, the $14 million increase would have limited impact on WLD.

When WLD was issued, exchanges vied to list it, and investors were eager to jump in. However, the controversies surrounding it have always been numerous, and the token model raises doubts about its price support. Odaily Planet Daily reminds users to conduct thorough data research and investment decisions, and to proactively guard against unknown risks.