Worldcoin, a project aiming for universal basic income (UBI) through a crypto token, has faced renewed criticism surrounding its token unlock schedule and tokenomics. The controversy, sparked by prominent crypto figures, raises concerns about the project’s fairness and potential manipulation.
On July 19th, 2024, crypto personality Defi Squared took to a popular crypto platform (Platform X) to criticize Worldcoin’s upcoming token unlock. Defi Squared’s primary concern lies with the low initial circulating supply – a mere 2.7% of the total 10 billion WLD tokens. This, according to him, creates an environment ripe for price manipulation by the Worldcoin Foundation team.
Defi Squared alleges that the team is strategically manipulating the token’s price through various tactics. These tactics include:
- Limited circulating supply: With such a low initial float, small purchases can significantly impact the price. This could be used to create a false impression of high demand.
- Market maker contracts: These contracts can be used to artificially inflate or deflate the price by placing buy or sell orders.
- Strategic announcements: Planned announcements around token unlocks could be timed to influence market sentiment.
The recent extension of the lock-up period further fueled the fire. Defi Squared suggests this extension is another attempt to control market sentiment.
Adding fuel to the fire, Defi Squared revealed that after one year of the unlock event, insiders will hold a staggering 60% of the total circulating supply. This, he argues, grants them undue control over the price, potentially allowing them to “dump” their tokens and crash the price.
“This seems to directly counter the justification that the float is being left low right now to benefit UBI recipients,” stated Defi Squared, highlighting the contradiction between the claimed purpose and the potential outcome.
Defi Squared’s accusations resonated with other crypto figures. Prominent figures like ZachXBT and Wazz Crypto joined the chorus of criticism. ZachXBT labeled WLD “the biggest scam token of the bull run,” while Wazz Crypto criticized the project on multiple fronts, including tokenomics, data collection, and unlock schedules.
The negative sentiment surrounding the token unlock event had a tangible impact. The price of WLD plummeted by 13.8% within 24 hours of Defi Squared’s post.
This controversy raises serious questions about Worldcoin’s future. The project’s core ideal of financial inclusion through UBI appears at odds with the alleged tokenomics manipulation. If the accusations hold true, Worldcoin could face a significant loss of trust from the crypto community.
The Worldcoin Foundation has yet to respond to these allegations publicly. Transparency and clear communication regarding the token unlock schedule and rationale behind the tokenomics design are crucial to regaining trust. Only time will tell if Worldcoin can weather this storm and deliver on its ambitious vision of a UBI-powered future.