#Crypto #Worldcoin #DeFiSquared #Tokenomics #WLDToken #Blockchain #Cryptocurrency #SamAltman
Crypto trader DeFiSquared recently highlighted significant concerns regarding the Worldcoin project and its native token, WLD. The project, co-founded by Sam Altman of OpenAI fame, has drawn attention not for its ambitious vision of providing a sort of universal basic income through cryptocurrency but for its controversial tokenomics. DeFiSquared has labeled these tokenomics as “predatory”, pointing out the massive wealth transfer they potentially entail, which could deviate from the project’s purported mission.
The analysis by DeFiSquared reveals worrying aspects of Worldcoin’s strategy, such as the hyperinflation of the WLD token. With a fully diluted valuation (FDV) at $60 billion, the daily devaluation of the token stands at 0.6% due to the emissions from grants and operator claims, which are mostly sold immediately upon release. This aggressive sell-off behavior is expected to escalate as the Worldcoin Foundation has announced plans to sell $200 million more WLD tokens at a discount to trading firms, significantly increasing the circulating supply by 18%. This move, utilizing tokens allocated for the “Community”, actually benefits adversarial parties at the expense of the broader WLD community and the foundation itself.
More alarming is the scheduled token allocation to venture capital and team members slated to begin in just 70 days from the analysis’s publication. This event is predicted to push the supply of WLD up by 4% daily, translating into nearly $50 million per day of selling pressure on the WLD tokens. DeFiSquared argues that such a scenario would only benefit insiders hoping to cash out at the project’s high FDV. This mechanism of enriching insiders precedes a worrying parallel to tactics employed by controversial figures such as Sam Bankman-Fried of FTX. Furthermore, DeFiSquared accused the foundation of employing “predatory tokenomics” evident from their actions like the termination of a market maker contract to manipulate WLD prices.
Despite these criticisms, Worldcoin and its connection with high-profile names like Sam Altman have continued to generate buzz within and beyond the crypto community. However, DeFiSquared’s analysis serves as a critical reminder for investors to approach such projects with caution, especially given the speculative nature of cryptocurrency investments. This detailed breakdown by DeFiSquared not only raises questions about the sustainability of Worldcoin’s model but also about the broader implications of tokenomics designs within the crypto space. Their analysis underscores the importance of transparency and ethical considerations in the rapidly evolving world of cryptocurrency.
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