Prominent cryptocurrency exchange Bybit trader DeFi2 conducted a short-selling analysis of Worldcoin‘s WLD token, proposing that Worldcoin has the potential to be the most significant wealth transfer of this cryptocurrency market cycle.
However, a post on the social media platform X DeFi2 suggests that contrary to the project’s mission of universal basic income, this transfer appears to primarily benefit its team and insiders.
The trader cautions that the WLD token could face aggressive selling pressure as more token unlocks occur in the upcoming months. He highlighted the hyperinflation of WLD by noting that at its current $60 billion fully diluted valuation (FDV), it is experiencing a daily devaluation of 0.6% due to emissions from grant and operator claims, the majority of which are promptly sold according to on-chain analytics.
Furthermore, the Worldcoin Foundation recently disclosed its plan to sell an additional $200 million worth of tokens to trading firms. This amounts to an extra 18% of the total circulating supply, offered at a discount to counterparties. Despite being sourced from the “Community” allocation of WLD token supply, these $200 million worth of tokens are being sold to adversarial parties for the foundation’s benefit.
Additionally, in a span of only 70 days, when venture capital and team unlocks commence vesting, the WLD token supply will start inflating at a rate of 4% per day from unlocks and emissions. This translates to nearly $50 million daily of continuous selling pressure on the token that insiders are aiming to cash out at a $60 billion FDV, according to DeFi2.
Worldcoin realistically might become the greatest transfer of wealth of this entire cycle. Unfortunately, this wealth transfer isn't in the form of universal basic income as their mission suggests, but instead to the pockets of the team and insiders. I’ve posted a bit on it… pic.twitter.com/Gr83mnt3Ms
— DeFi^2 (@DefiSquared) May 13, 2024
Worldcoin’s Next Major Token Unlock For WLD Set To Commence In July
The upcoming major token unlock for Worldcoin is expected to start in July. Currently, 14% of the total token supply, equivalent to 1.44 billion WLD tokens, has been unlocked, leaving 8.56 billion tokens still locked. According to the planned allocations, Worldcoin intends to distribute 75% of the total token supply to the community, allocate 9.5% to investors, earmark 13.5% for initial development, and reserve 2% for other purposes.
Founded in 2023 by Tools of Humanity, Worldcoin positions itself as a “privacy-preserving” digital identity authentication initiative. Its primary goal is to establish the world’s largest human identity and financial network, guaranteeing ownership for every individual. To accomplish this, the project employs iris scanning for identity verification and rewards users with a modest amount of WLD tokens in exchange.
Recently, the project revealed its intention to introduce the Ethereum Layer 2 network, World Chain, with the aim of improving Worldcoin’s scalability to serve a larger user base. Furthermore, World Chain is expected to provide users with the flexibility to utilize both WLD and ETH for transaction fees.
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