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Worldcoin (WLD): Analysis of the leading AI project in cryptos

Worldcoin (WLD): Analysis of the leading AI project in cryptos

How it works, opportunities, regulation, the role of the WLD token... Our analysts' independent study of the Worldcoin project.

The Big Whale's opinion 🐳

Crypto projects operating in the artificial intelligence sector have been one of the most buoyant themes in recent weeks.

Worldcoin is the leading crypto security in this sector and its token WLD has recorded a 300% rise over 30 days.

Worldcoin is much criticised for its dystopian vision, but on the other side it is working for a fundamental device with the development of artificial intelligence: proving online that you are a human being and not a machine.

The project is inseparable from one of its co-founders, Sam Altman, who is also co-founder and CEO of OpenAI, the company that develops ChatGPT.

Overview 🧬

Worldcoin is a project created in 2020 and its token was launched in July 2023 (read about its genesis).

The project is developing an anonymous digital passport, based on the principle that it is increasingly difficult to distinguish between human and machine in cyberspace.

To ensure that each passport corresponds to a unique person, the device relies on biometric evidence, in this case the iris of the eye.

Worldcoin has developed a device called Orb that scans our irises to generate a code that will prove that a real person is behind a crypto address. You have to physically move to have your iris scanned.

Each crypto address linked to a verified iris can then claim WLD tokens distributed on a recurring basis.

More than 4.2 million people across 35 countries have registered. In Europe, Orbs can only be found in Germany and Portugal.

Financing 💰

The project is being developed by US company Tools for Humanity, which has raised a total of $240 million in three funding rounds.

The first funding round took place in October 2021 for $25 million, with notable participation from a16z, Coinbase Ventures, Multicoin Capital, Digital Currency Group. Three Arrows Capital (in bankruptcy) and Sam Bankman Fried, the founder of FTX, also participated. This round was raised at a valuation of $1 billion.

A second round took place in March 2022 with $100 million solely from a16z and Khosla Ventures. This round was at a valuation of $3 billion.

Finally, a Series C round took place in May 2023 with $115 million from Blockchain Capital, a16z, Distributed Global and Bain Capital (we revealed this exclusively).

Team and community 👾

Alex Blania is the co-founder and CEO of Tools for Humanity. He previously worked as a researcher in the field of artificial intelligence. It is he who is publicly promoting the project.

The attention surrounding Worldcoin is nevertheless crystallised around Sam Altman, who is also a co-founder. The American entrepreneur is known for having created the start-up OpenAI, the originator of the ChatGPT conversational robot.

The latter is increasingly in the background. According to our information, it is looking to resell some of its tokens via OTC sales.

Tools for Humanity is based in San Francisco (USA).

Governance is currently provided by the Worldcoin Foundation, which is headquartered in the Cayman Islands, a territory often chosen by US-origin crypto projects to escape the regulatory risks hanging over this sector.

This foundation is still largely controlled by Tools for Humanity, but its influence is expected to diminish over time.

We contacted the company for further information, but it was unavailable to answer our questions.

How it works 👁

The gateway to Worldcoin is its mobile app called World App. When you install it on your smartphone, two separate private keys are generated: one corresponds to a crypto wallet and the other to the user's World ID, a digital passport.

The crypto wallet and the World ID are linked by cryptographic encryption. It is impossible to identify one from the other.

World App geolocates an Orb near where you are. The Orb scans our iris, checks if it is unique and generates a linked unique code.

By default, all images are deleted, only the code is stored in a centralised database (which the project plans to decentralise at a later date). It is not possible to identify an iris from its code thanks to zero-knowledge proof technology, a cryptographic protocol enabling secure authentication of information.

Why irises rather than fingerprints? Because it's easier to distinguish between two different irises, and irises are less likely to change over time.

This operation allows us to "stamp" our World ID passport, proving that we are a genuine unique human. We can therefore prove to the various partner applications that we are a unique user, without it being possible for them to know anything about our identity.

All users with a validated World ID can collect a welcome bonus of 10 WLD tokens (currently $100). It is also possible to receive a bonus of 3 WLD (30 dollars) every 15 days by claiming it in the application. Amounts are subject to change over time.

The amount and frequency of bonuses are currently controlled by the Worldcoin Foundation.

Where can World ID be used? 🤔

It is currently possible to prove your "humanity" on several platforms that allow this module to be integrated.

The Discord social network allows server administrators to set it up. This is a relevant use as many bots proliferate on Discord.

With the World ID Discounts application on Shopify, merchants can give discounts to customers who verify themselves with World ID. This prevents fake emails being sent in an attempt to claim a discount multiple times.

The Worldcoin integration with Reddit also offers the ability for Subreddits moderators to assign specific tags to users who verify with World ID. This allows members of that Subreddit to clearly identify users who are unique humans, helping to improve trust and safety within communities.

The Telegram World ID Bot, meanwhile, verifies that an account belongs to a unique human before it is allowed to send messages to a group.

All these applications were developed by Tools for Humanity.

The WLD token 🪙

The WLD is a central element of the Worldcoin project. It is an ERC20 token launched on Ethereum, but premium tokens are distributed on Optimism, a layer 2 of Ethereum, where transaction fees are lower. As a result, most WLD activity takes place on Optimism, but it is possible to withdraw them to Ethereum for greater security.

According to the project's backers, WLD is intended to be the most widely distributed currency in the world. This is why the tokens have not been the subject of a single large distribution (airdrop) and are distributed in small quantities but continuously in the form of rewards.

The price is currently close to 10 dollars.

Note that people who hold Orbs also receive a reward when someone has their iris scanned. This was initially paid out in USDC stablecoins, but has been in WLD since October 2023.

Only 1.5% of tokens are in circulation for a capitalisation of $1.5 billion (98.5% will be progressively unlocked to follow the adoption curve). If all tokens were available on the market, this would rise to $97 billion.

In time, the WLD is to become the governance token for the Worldcoin protocol, but for now it is the Worldcoin Foundation that governs.

One of the important points of Worldcoin tokenomics is that 75% of tokens are reserved for the community. Of this total, at least 60% will be allocated to users via bonuses, with the remainder used to fund the ecosystem and network operations.

All tokens will be distributed over 15 years, i.e. until 2038. Nevertheless, half will be liquid by 2026.

Private investors and the project team own 25% of the tokens. They are subject to a one-year lock-up period until July 2024 and will be progressively released until July 2026.

WLD1
WLD distribution breakdown

WLD2
WLD release schedule

Risks and limitations 🥵

The Orb is a device created by Tools for Humanity. It is not possible to verify whether it has been built correctly and whether it does not contain backdoors that could retrieve our data.

Ethereum creator Vitalik Buterin published a blog post at the end of July 2023 in which he analyses the project. He believes that while the aim is laudable (to develop a "digital proof of humanity"), Worldcoin presents a number of security, privacy and forgery risks.

In particular, he mentions the case where fake people would be created by 3D printing fake irises. Vitalik Buterin also highlights the problem of access to Orbs.

To date, the machines are only available in a few countries (currently Argentina, Germany, Chile, the United States, Japan, Mexico, Portugal and Singapore). It will be complicated to facilitate its access everywhere in the world, especially in the most remote regions that are also the least banked.

Regulation ⚖

The WLD token is not available to individuals or companies residing in the United States or certain other restricted territories. However, World ID and the World App are permitted in the US.

In March 2024, the Spanish data protection authority asked Worldcoin to stop collecting personal information and to stop using the data already collected.

The project is also the subject of an investigation in France. Argentina, Portugal, Kenya and the UK are also keeping a close eye on it.

The project's existence is therefore under serious threat from many jurisdictions.

Roadmap 📅

In time, Worldcoin wants to add more features to World ID so that it is possible to prove more than just being a unique human, such as being of legal age.

The project aims to create a standard protocol that anyone can adopt to build tools to prove humanity, which would solve the problem of distributing Orbs.

Market analysis by Chadi El Adnani, Head of Content & Research at SUN ZU Lab 📈

The WLD has seen an explosion since the start of the year, both in terms of price and trading volumes, surpassing $1 billion on 9 March following the announcement that Sam Altman was returning to the OpenAI board. This announcement propelled the price towards $12.

We have found that WLD's price fluctuations are strongly linked to announcements about OpenAI, Worldcoin's sister start-up, also founded by Sam Altman. In terms of performance, WLD is outperforming BTC and ETH, rising more than 200% over the year.

Worldcoin's recent problems with the Spanish regulator over the collection of users' private personal data are nothing new. The price of WLD has long stagnated at around $2 since its launch in July 2023, mainly due to repeated attacks from regulators around the world and a lack of adoption.

We have covered this and other aspects of the Worldcoin project in detail in this article.

1 = 16/02/2024: OpenAI launches Sora, a revolutionary AI capable of generating videos.

2 = 01/03/2024: Elon Musk sues OpenAI and Sam Altman for breach of contract.

3 = 06/03/2024: Worldcoin is ordered to suspend its collection of personal data in Spain.

4 = 08/03/2024: OpenAI's board reinstates Sam Altman and expands.

SZL

Where can you buy the WLD token? 🛒

The WLD is not available on a large number of exchange platforms, but you can find it on two exchanges regulated in France: Binance and Cryptocom.

It is also possible to acquire it on the decentralised exchange Uniswap.

Conclusion 🧭

Worldcoin is undeniably an interesting project because it aims to solve a problem that will become increasingly important with the development of artificial intelligence: proving that you are a human being in cyberspace.

World ID takes advantage of zero-knowledge proof technology, which enables us to prove our identity online while preserving our data. This opens the door to numerous use cases.

As the Orbs and how they work are not open source, this poses a problem for data security and use.

Investigations by various national authorities responsible for protecting privacy are threatening the existence of the project.

At present, the only role of WLD is to be paid out as a reward to individuals who have agreed to have their irises scanned. Its real usefulness is therefore severely limited, as it amounts to printing money for free.

The WLD has appreciated sharply in recent weeks, but 98.5% has yet to be released. This means it may exert selling pressure.

WLD is nonetheless emerging as one of the leading stocks in the AI/crypto theme.

Our other analyses 🔍

⭐ Polygon's analysis (MATIC)

⭐ Dymension's analysis (DYM)

⭐ Starknet's analysis (STRK)

⭐ EigenLayer's analysis

⭐ The analysis of Celestia (TIA)

⭐ The analysis of Lido (LDO)

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