The maximum circulating supply of WLD at the initial launch will be 143 million WLD, of which 43 million WLD are allocated to users who use Orb verification during the project's Pre-Launch phase, and 100 million are loaned to market makers operating outside the United States (the loan matures in 3 months).
Editor: Karen, Foresight News
Worldcoin officially announced today that the Worldcoin Protocol, World ID, WLD tokens and World App are now available globally (where legally permitted). Subsequently, several exchanges including OKX, Bitget, and Binance have announced the launch of WLD.
Foresight News has compiled Worldcoin’s token economic distribution and release model for readers’ 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 will likely take place on the Optimism network. If needed, the token can be bridged back to Ethereum via Optimism.
The initial supply of Worldcoin is capped at 10 billion for 15 years after the token launch (enforced by the WLD smart contract). After 15 years, if users can decide through governance whether to turn on inflation mode, the maximum annual inflation rate will be 1.5%. The maximum circulating supply at the initial launch will be 143 million WLD, of which 43 million WLD are allocated to users who use Orb verification during the project's Pre-Launch phase, and 100 million are loaned to market makers operating outside the United States (the loan matures in 3 months).
The Worldcoin token economic model is as follows:
75% will be allocated to the Worldcoin community, most of the tokens will be allocated to users, and some will be allocated to the ecosystem fund and network operations. The Foundation will manage the allocation of these tokens in accordance with its Articles of Incorporation and authorize the governance of the gradual decentralization of token management decisions;
9.8% is allocated to the initial development team, Tools for Humanity (TFH) and other service providers who took the initial steps in developing Worldcoin. TFH currently provides services to the Worldcoin Foundation and operates the World App; (the distribution ratio is inconsistent in the chart and the article)
13.5% is allocated to Tools for Humanity investors. TFH investors provide funding to enable TFH to support the multi-year pre-launch phase of the Worldcoin project;
The remaining 1.7% will be used as TFH reserves. After launch, TFH will retain 170 million WLD reserves. (The distribution ratio in the chart and article is inconsistent)
It is worth noting that Worldcoin announced in 2021 that the proportion of tokens allocated to TFH and the initial development team was 20%, and the latest white paper has increased the allocation ratio to 25%. In this regard, Worldcoin explained that responsible development and launch of the network is more complicated and expensive than TFH originally expected.
Until Worldcoin is decentralized and self-sustaining, the Worldcoin Foundation will support the Worldcoin ecosystem by distributing community tokens primarily to:
User grants (≥ 60%), including Genesis Grant (25 WLD), Welcome Grant incentives obtained after verifying Orb (1 WLD, decreasing over time), and regular grants, etc.
Network Operations (≤ 10%), initially focused 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 R&D, Orb R&D, standard setting, audit and certification, ecosystem grants, incentive programs, liquidity provisions, foundation operations.
Among them, World Assets Ltd. has entered into loan agreements with five market makers operating outside the United States. These five entities received loans of 100 million WLD within 3 months of the token launch. At the end of the three months, each entity must return its loan or can choose to purchase any number of tokens up to the amount of the loan it received. The unit price of WLD purchased will be set according to the following formula: 2.00 + (0.04 * X), where X equals the number of tokens purchased divided by one million.
The Worldcoin Foundation has set an ideal token distribution target as shown below:
The two most important points about the WLD release model are:
Team and investor tokens are locked at launch;
Tokens claimed by users will not be locked.
The maximum circulating supply at the initial launch will be 143 million WLD, of which 43 million WLD are allocated to users who validate with Orb during the project's Pre-Launch phase, and 100 million are loaned to market makers operating outside the United States (the loan matures after 3 months). Worldcoin said that during the launch week, the number of tokens allocated to users is expected to increase significantly, as new and existing Orb validators will be able to apply for a genesis grant of 25 WLD.
The following diagram shows the WLD unlocking plan for the next 15 years. After that, the release rate of WLD tokens allocated to the Worldcoin community will be determined by governance, depending on factors such as the growth rate of the number of Worldcoin users.
Note: This graph shows the earliest unlocked state of all tokens.
Among them, the unlocking schedule of tokens allocated to the community is enforced by four smart contracts. Tokens allocated to users and operators will not be locked.
The table below shows the unlocking of community tokens in each specified time period. In each time period, the same number of tokens are unlocked every day.
Tokens allocated to TFH investors will be contractually locked for 12 months upon the exercise of their respective token warrants by such investors and then unlocked evenly on a daily basis over the next 24 months.
Tokens allocated to the initial development team, tokens already allocated to previous and current team members will be contractually locked for 12 months after launch and then unlocked evenly daily over the next 24 months.
Tokens allocated to the TFH Reserve will also be contractually locked for at least as long as the token lockup period applicable to TFH investors and team members. The exact lockup period will depend on when these tokens were allocated.
WLD Utility and Allocation Targets
Worldcoin said its Pre-Launch phase lasted from May 2021 to July 2023. During this period, more than 2 million people verified their World ID on Orbs in more than 30 different countries. More than 4,300 WLD tokens have been allocated to these users before launch. At launch, Worldcoin will increase the number of Orbs to 1,500 to meet global demand for World IDs.
The Worldcoin Foundation will manage the project and work to gradually decentralize governance and the ecosystem, and provide the majority of the WLD token supply to participants in the Worldcoin protocol. The distribution entity for WLD tokens is World Assets Ltd., a subsidiary of the Worldcoin Foundation.
Worldcoin said that WLD is designed as a utility token with governance attributes. In addition to the traditional "one token one vote" governance mechanism, the introduction of World ID paves the way for the "one person one vote" mechanism. These two mechanisms can be combined in a variety of ways to achieve new governance methods.
After the token launch, the Worldcoin Foundation will solicit proposals and work with the community to discuss how the World ID and WLD tokens interact within the Worldcoin governance model.
Other use cases include that users may decide to use WLD tokens to pay for certain actions in the World App or other wallet applications, make other payments (e.g., remittances, tipping artists, buying and selling goods and services). Worldcoin says that in the long run, WLD tokens can also be considered a global store of value.