Worldcoin to Unlock 2 Million WLD Tokens Daily From July 24

Extended Lock-Up Period

Tools for Humanity (TFH), the developer behind Worldcoin, has announced an extension of the lock-up period for WLD tokens allocated to team members and investors. This strategic move alters the token distribution timeline, with 2 million tokens set to be released daily starting July 24, 2024. Originally, the schedule projected the daily release of 3.3 million tokens.

This adjustment aims to manage market saturation and support the token’s value by allowing a more measured increase in circulating supply. The revised strategy is intended to reduce the potential for selling pressure that might arise from early investors selling their tokens.

Amidst this development, WLD’s price surged by 23% within the last 24 hours, reflecting investor optimism. As of now, WLD is trading at $2.84, with a market capitalization of $784.9 million.

Despite the positive price movement, HumaCapital noted, “Looks like WLD is getting shorted hard after the news that token unlocks will be spread out over a longer time period.” This suggests that some investors anticipate potential price drops due to the gradual increase in token supply.

The lock-up period extension—from three to five years for 80% of the tokens—aims to bolster the Worldcoin ecosystem’s stability. The unlocking process will now span four years, concluding in July 2028, with the vesting schedule extending to 2029.

Worldcoin's Tokenomics Scrutinized Amid Low Float Ratio and Upcoming Token Unlocks

Vincent Maliepaard, Marketing Director at IntoTheBlock, highlighted the importance of unlock schedules, stating, “Token unlocks, whether linear or cliff, play a crucial role in asset prices. Linear unlocks tend to diffuse market impact over time, while cliff unlocks can cause abrupt shifts.”

Worldcoin’s tokenomics have faced scrutiny, particularly concerning its low float ratio. A CoinGecko report reveals that among the top 300 cryptocurrencies by market capitalization, Worldcoin has the lowest float ratio at 0.02. This low ratio suggests limited tokens are available in circulation, potentially leading to heightened volatility due to future token unlocks.

Despite these concerns, Worldcoin continues to attract users to its network. Currently, over 6 million people hold an orb-verified World ID, a digital passport that authenticates a user’s humanness and facilitates access to the network. Over 211 million WLD tokens have been claimed by verified World ID holders, accounting for over 77% of the 275 million WLD in circulation.

While the extended lock-up period and gradual token release may stabilise the market, the potential for increased volatility remains due to the low float ratio and upcoming token unlocks.