Worldcoin (WLD)

Worldcoin (WLD)

Most recent update: [April 17, 2024]

What is WLD?

The Worldcoin project aims to create the largest global identity and financial network, operating as a public utility and granting ownership to all participants.

Central to the Worldcoin system is the World ID, a privacy-focused global identity network. World ID allows users to confirm their identity online ("Proof of Personhood") while preserving their privacy using zero-knowledge proofs.

Who is behind WLD?

Worldcoin was established by Sam Altman, Alex Blania, and Max Novendstern, with Max Novendstern departing from the project in July 2021. Sam Altman, the most prominent among the founders, is also the co-founder and current CEO of OpenAI and was previously the president of Y Combinator, a well-known startup incubator. The initial research and development efforts for Worldcoin were carried out by Tools for Humanity (TFH) along with other collaborators.

Worldcoin has successfully raised over $250 million through multiple funding rounds, with contributions from notable investors such as a16z, Khosla Ventures, Bain Capital Crypto, Blockchain Capital, and Tiger Global, among others.

How does it work?

To participate in the Worldcoin protocol, individuals need to start by downloading World App, the initial wallet application that facilitates the creation of a World ID. Users must then visit a physical device known as the Orb to have their World ID verified by the Orb. These Orbs are primarily managed by independent local businesses known as Orb Operators. The Orb employs multispectral sensors to confirm both the humanness and uniqueness of each user, and it automatically deletes all images on the device by default, unless there is explicit consent to retain data under Data Custody.

Holders of Orb-verified World IDs are eligible to receive periodic grants of free WLD tokens, if they meet the necessary criteria.

The WLD Token and Tokenomics

The initial total supply of Worldcoin is set at 10 billion WLD tokens.

For the first 15 years post-launch, the total supply is capped at 10 billion WLD, a limit enforced by the WLD smart contract. After this period, the governance may opt to introduce an inflation rate up to 1.5% per year, depending on what is considered necessary for the protocol’s long-term sustainability. The decision on how to distribute any new tokens minted will also be determined by governance. The maximum inflation rate of 1.5% per year is set by the WLD smart contract, though the default inflation rate is 0% unless altered by governance.

The distribution of the 10 billion WLD tokens is as follows:

• 75% of the tokens are designated for the Worldcoin community.
• 9.8% is given to the Initial Development Team.
• 13.5% is allocated to TFH Investors.
• 1.7% is reserved for the TFH Reserve.

The Worldcoin Foundation has also set a goal to allocate at least 60% of all WLD tokens from the Worldcoin Community pool to individuals through user grants, reflecting their aspiration for extensive community distribution.

Security

The WLD token contract is active on the Ethereum Mainnet and has been bridged to the Optimism "layer 2" network, thereby inheriting the security characteristics of both blockchains. The cybersecurity company Trail of Bits has completed an audit of Worldcoin's ORB technology, confirming its compliance with rigorous privacy standards, especially in the handling and storage of personally identifiable information (PII), within the scope of its review.

Drawbacks and risks

Navigating the cryptocurrency landscape, Worldcoin encounters inherent risks and hurdles, such as market volatility, regulatory shifts, and the complexities of merging traditional and blockchain finance. The platform's longevity hinges on its adeptness in mitigating these risks, adapting to regulatory evolutions, and sustaining innovation within the swiftly evolving blockchain sector. Despite WLD's promising prospects, investors and users must remain aware of the associated risks, including the experimental nature of blockchain financial solutions and the unpredictable market dynamics.

Finally, as common to many ERC-20 tokens and more broadly Proof-of-Stake networks, their blockchain architecture dictates that those with the most staked tokens will have the most sway in the network’s functioning. This effectively places richer wallets in a position of power. Thus, if one person or a group of entities can acquire 50% of the network’s voting power, they would be able to control it.

Due Diligence  

Before listing WLD on the VirgoCX Platform, VirgoCX performed due diligence on WLD and determined that WLD is unlikely to be a security or derivative under Canadian securities legislation. VirgoCX’s analysis includes reviewing publicly available information on the following: 

• The creation, governance, and location of WLD and/or its primary development team;
• The supply, demand, maturity and liquidity of WLD; and
• Legal and regulatory risks associated with WLD. 

Statutory Rights under Securities Legislation

VirgoCX is offering Crypto Contracts on crypto assets in reliance on a prospectus exemption contained in the exemptive relief decision Re VirgoCX Inc. dated May 30th 2022 (the Decision). Please be aware that the statutory rights in section 130.1 of the Securities Act (Ontario) and, if applicable, similar statutory rights under the securities legislation of each other province and territory in Canada do not apply in respect of the Crypto Fact Sheet to the extent a Crypto Contract is distributed under the prospectus relief in the Decision.

Further Reading

To learn more about the technology behind WLD, check out these in-depth resources here:

• The official site of WLD
• Coinmarketcap’s overview of WLD
• Coingecko’s overview of WLD
• Coinbase’s overview of WLD, along with the relevant news and blogs related to WLD.