Worldcoin Adjusts Token Unlock Strategy: 2 Million WLD Released Daily from July 24

KEYTAKEAWAYS

TABLE OF CONTENTS

• KEY TAKEAWAYS
• DISCLAIMER
• WRITER’S INTRO

CONTENT

Tools for Humanity extends lock-up period for team and investor tokens, revising distribution timeline. WLD price surges 23% as new strategy aims to manage market supply and support token value. Concerns over potential selling pressure persist.

Tools for Humanity (TFH), the developer behind Worldcoin, has announced a significant change to its token distribution strategy. Starting July 24, 2024, the company will release 2 million WLD tokens daily, a reduction from the originally planned 3.3 million. This adjustment comes as TFH extends the lock-up period for tokens allocated to team members and investors.

The revised approach aims to mitigate market saturation and bolster the token’s value by managing the influx of tokens into circulation. This strategic move has already shown positive results, with WLD’s price surging 23% in the last 24 hours. As of the latest update, WLD is trading at $2.84, boasting a market capitalization of $784.9 million.

>> Read more: Worldcoin (WLD): “Human Verification” in Global ID Network

However, market analysts caution that the potential for selling pressure remains. The increased supply could incentivize early investors to sell their holdings. As noted by HumaCapital, “Looks like WLD is getting shorted hard after the news that token unlocks will be spread out over a longer time period.”

To enhance ecosystem stability, TFH has extended the lock-up period from three to five years for 80% of the tokens. The unlocking process will now span four years, concluding in July 2028, with the vesting schedule extending to 2029.

Vincent Maliepaard, Marketing Director at IntoTheBlock, emphasizes the importance of unlock schedules: “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. By closely monitoring unlock schedules, investors can better understand growth potential and adjust their strategies accordingly.”

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

Despite these challenges, Worldcoin continues to grow its user base. Over 6 million people now hold an orb-verified World ID, a digital passport authenticating user humanness and facilitating network access. The allocation of WLD tokens to verified World ID holders remains unchanged, with over 211 million tokens claimed to date, representing over 77% of the 275 million WLD in circulation.