Worldcoin, a project aiming to build a global identity network, has implemented a strategic shift in its token (WLD) distribution. Tools for Humanity (TFH), the developer behind Worldcoin, extended the lock-up period for tokens allocated to its team and investors. This move alters the initial release schedule, with a daily release of 2 million WLD tokens commencing on July 24, 2024. Originally, the plan called for a daily release of 3.3 million tokens.
The revised strategy focuses on managing market saturation and bolstering the value of WLD. By regulating the influx of tokens, the team aims for a more gradual increase in circulating supply, potentially mitigating sharp price drops. This adjustment seems to have resonated with investors, as WLD’s price surged over 23% within 24 hours, reaching $2.84 at the time of writing.
However, concerns linger regarding potential selling pressure. The increased supply in the long run might incentivize early investors to offload their holdings. Some market analysts have already observed signs of shorting activity following the news.
The lock-up extension itself is more substantial than initially planned. Previously set at three years, the lock-up period for 80% of the tokens has been extended to five years. This translates to a four-year unlocking process concluding in July 2028, with the full vesting schedule reaching 2029.
Unlock schedules undeniably play a vital role in influencing token prices, as highlighted by Vincent Maliepaard, Marketing Director at IntoTheBlock. He emphasizes that these schedules, whether linear or with concentrated releases at specific points, can significantly impact asset prices. Investors who monitor unlock schedules closely can gain valuable insights for strategizing their investments.
Worldcoin’s tokenomics, particularly its low float ratio, have also drawn scrutiny. A report by CoinGecko reveals that Worldcoin boasts the lowest float ratio (0.02) among the top 300 cryptocurrencies by market capitalization. This low ratio signifies a limited number of tokens currently circulating, potentially leading to increased volatility in the future as more tokens are unlocked.
Despite these concerns, Worldcoin continues to attract users. The network currently boasts over 6 million individuals holding orb-verified World IDs, a digital passport that verifies a user’s identity and grants access to the network. Importantly, the allocation of WLD tokens to verified World ID holders remains unchanged, with over 211 million tokens claimed so far, representing more than 77% of the 275 million WLD currently in circulation.
In conclusion, Worldcoin’s adjusted token unlock schedule represents a calculated move to navigate market forces and ensure the project’s long-term stability. While potential selling pressure and tokenomics remain points of discussion, the project’s user growth suggests continued traction. Only time will tell how these factors will ultimately impact the value of WLD and the success of the Worldcoin network.
