Worldcoin, a project by Tools for Humanity (TFH), has recently announced a change in its token distribution strategy. The lock-up period for WLD tokens allocated to team members and investors has been extended, with the release of 2 million tokens daily now scheduled to begin on July 24, 2024. This adjustment aims to reduce market saturation and support the token’s value, as well as to manage the influx of tokens into the market. As a result of this decision, WLD’s price has surged by 23% in the last 24 hours, reaching $2.84 with a market capitalization of $784.9 million.
Despite the positive price performance, there is still concern about potential selling pressure from early investors due to the increased token supply. HumaCapital noted that there seems to be significant shorting of WLD following the news of the extended lock-up period. The extension of the lock-up period for 80% of the tokens from three to five years is intended to enhance the stability of the Worldcoin ecosystem. The unlocking process will now span four years, ending in July 2028, with the vesting schedule extended to 2029.
Vincent Maliepaard, Marketing Director at IntoTheBlock, emphasized the importance of unlock schedules in managing asset prices. He stated that linear unlocks help diffuse market impact over time, while cliff unlocks can lead to abrupt shifts. By monitoring unlock schedules closely, investors can better understand growth potential and adjust their strategies accordingly. Worldcoin’s tokenomics, particularly its low float ratio of 0.02, have been under scrutiny. This low ratio suggests limited tokens available in circulation, potentially leading to increased volatility with future token unlocks.
Despite concerns about tokenomics, Worldcoin has been successful in attracting users to its network. Over 6 million people currently hold an orb-verified World ID, which serves as a digital passport authenticating a user’s humanness and granting access to the network. The allocation of WLD tokens to verified World ID holders has remained unchanged, with over 211 million tokens claimed so far, accounting for over 77% of the 275 million WLD in circulation. It will be interesting to see how these developments impact the future of Worldcoin and its position in the market.
In conclusion, Worldcoin’s decision to extend the lock-up period for WLD tokens reflects a strategic move to manage token distribution and support the token’s value. Despite concerns about potential selling pressure and tokenomics, the project continues to attract users to its network through the orb-verified World ID system. By closely monitoring unlock schedules and adjusting strategies accordingly, investors can navigate the changing landscape of the Worldcoin ecosystem. As Worldcoin moves forward with its revised token distribution strategy, the market will be watching closely to see how these changes impact the project’s future success.
