- Experts evaluated the tokenomics model, asset allocation scheme and WLD’s current market position.
- According to this analysis, the future value forecast of the Worldcoin project is challenging and investors should be cautious.
The WorldCoin project’s core network and the WLD token were released at the end of July 2023. At the listing stage, the asset was trading at $1, but then the price jumped to $3.15, according to CoinMarketCap. It was a new high after which the token never managed to break the $3 mark:
“Despite its impressive capitalization of $400 million, the token faces difficulties in maintaining its valuation due to certain characteristics of tokenomics and market conditions,” Bitget analyst and managing director Gracie Chen.
WLD’s current supply exceeds 115.2 million, according to Dune:
According to CoinMarketCap, WLD’s supply initially totaled 111 million tokens. 100 million of that the company lent to five market makers outside the U.S. for three months. They must then return the assets or repurchase them at a fixed price.
The cost is determined by the formula – $2 + (0.04 * X), where X represents the ratio of WLD/1 million purchased. According to Chen, market makers have a significant influence on the token’s value as they control a 96% share of the supply.
The minimum selling price of $2.8 incentivizes them to distribute the asset, which puts price pressure on the market, she emphasized.
Also, according to Chen, limited investor interest should be taken into account when assessing Worldcoin’s price trend. It was dictated primarily by the need for retinal scans for participation.
“Although the company offered the NFT minte for early participation as an alternative, the 1.6 million holders of commemorative tokens issued by Optimism never received the WLD,” Chen emphasized.
This is also supported by Dune data:
The WLD issuance plan calls for about 17% of the supply to be distributed in the first year, 40% after three years, according to Worldcoin whitepaper Worldcoin. Tokens for Tools for Humanity (TFH) project participants, early investors and team members will be gradually unlocked daily after a 12-month freeze.
Chen said this would create a burden of $2.62 billion annually, calling into question the current valuation of the. At the same time, the token allocation between TFH participants and the development team changed from 20% to 25% due to the added complexity of setting up and launching the project.
This can be seen in the corresponding Dune graphic:
With limited investor participation, the current tokenomics model, and the chosen method of WLD allocation, estimating the cost of the project could face significant challenges, Chen said. She recommends traders take this position with caution, avoiding impulsive investments:
“In conclusion, Worldcoin’s path to sustaining its value requires careful consideration of tokenization and community engagement issues. As the market evolves, investors should remain vigilant and evaluate project development and partnerships.”