Worldcoin, which once made headlines for its futuristic vision, is now at the center of turmoil. This time, conflict is making news, not innovation. Sam Altman of OpenAI’s cryptocurrency project is at the heart of this tempest as it struggles to accomplish its ambitious goal of a worldwide digital identification system.
Concerns about token dilution, market manipulation, and legal obstacles have put the project—which aims to scan irises for digital IDs and reward participants with free WLD tokens—under close investigation.
The Dilution Dilemma
The crypto community has opposed Worldcoin’s tokenomics. With just 2.7% of its total WLD tokens in circulation, the project’s completely diluted market valuation is shockingly $22.4 billion, while having a current worth of $648 million.
This difference highlights the grave risk of token dilution. As more tokens become available and the value of each token seems to be dropping, current investors find themselves in a dangerous situation. The fact that just a tiny fraction of the total quantity is exchanged aggravates the problem as a major infusion of tokens might significantly affect the market price.
WLDUSD trading at $1.98 on the daily chart: TradingView.com
Allegations Of Market Manipulation
Allegations of insider trading and market manipulation raise concerns. DeFi Squared, an on-chain specialist, believes the Worldcoin management may affect the token price by controlling release dates and timing positive news with unlock events.
The claim is that market makers got 100 million tokens to create favorable conditions that would have allowed the project team to maintain a high value for the project despite market realities. Even though a Worldcoin representative denies these accusations, the charges have tarnished the initiative’s credibility.
Global Concerns And Legal Difficulties
Adding to its miseries, legislative hurdles are getting in the way of Worldcoin’s aspirations for global growth. Citing security and biometric data processing concerns, some countries have banned the programme either permanently or temporarily.
A man has his eyes scanned by a Worldcoin orb. Source: Rest of World.
Worldcoin’s inability to serve China, India, and the US makes it harder to accomplish its ambitious user acquisition goals. Worldcoin aimed to register 1 billion users by 2023, but legal issues have slowed expansion, casting doubt on its long-term sustainability.
Long-Term Survival
Worldcoin’s long-term survival is uncertain as it navigates these turbulent waters. Strong regulations, market manipulation claims, and token dilution difficulties threaten Worldcoin’s goal of developing a global digital identification system.
Even if digital identity management gives a lot of room for inventiveness, Worldcoin must solve these critical challenges to be relevant in the fast-changing world of cryptocurrencies and blockchain technology.
Featured image from Fortune, chart from TradingView
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