WLD token unlocking rules adjusted, market response positive but can it last?

Original title: "Worldcoin significantly extends the token unlocking time, can it reverse the huge selling pressure?"

Original author: Nan Zhi, Odaily Planet Daily

Since March, WLD (Worldcoin) has continued to decline, with the unit price falling from the highest point of nearly 12 USDT to the lowest point of 1.72 USDT. The fundamental reason is not only the overall market downturn, but also the more important factor is the large amount of token unlocking selling pressure of WLD.

However, in recent days, Worldcoin has made two consecutive moves to modify the token release rules, which caused the token to rise by 8% and 13% in one hour respectively. Odaily will explain in this article how much WLD's original selling pressure was and what impact the two modifications had on the continued unlocking.

WLD token unlocking data

WLD tokens were launched on July 14, 2023, with an initial circulation of 143 million, including 100 million loans from market makers, and a total of 10 billion. Excluding the loan portion, the real initial circulation is 43 million.

WLD token release was the most rapid in the first three years, with all community tokens unlocked in the first year, and institutional unlocking will be started from the second year, which will last for two years.

One year after the token was issued, the real circulation of WLD has risen to 276 million, with an inflation rate of 541%. Please note that the real circulation is based on the data returned by the Orb API. Token Unlocks uses the upper limit of theoretical circulation, with an initial circulation of 500 million and a current circulation of 1.65 billion. However, in reality, these tokens still need to be transferred from governance control to real circulation, and depend on the rate at which these tokens enter circulating supply is controlled by governance.

Three days ago, WLD was online for one year and opened TFH (Tools for Humanity) unlocking. The theoretical circulation will increase from the current 1.65 billion to 6.5 billion. Corresponding to 6.62 million tokens unlocked daily, according to the current unit price of 2.8 USDT, there will be a daily selling pressure of 15.42 million US dollars.

If calculated based on the current actual circulation and upper limit ratio, the daily selling pressure is about 2.76/16.5 × 1542 = 2.58 million US dollars, but it is impossible to predict how long this ratio will last and how it will change.

(Odaily Note: Tools for Humanity is the actual technology development entity and the operator of World App. TFH unlocking includes investors, employees, consultants and other objects.)

What is the impact of modifying the unlocking rules

Worldcoin modified the token release rules twice, the first of which occurred on July 10, when Worldcoin announced that the claim period for unclaimed WLD reserved tokens would be extended by one year. This proposal actually increased the selling pressure of WLD. The background of this part of the token is that shortly after the launch of Worldcoin in July 2023, the Worldcoin Foundation introduced a WLD token reservation mechanism, allowing users who have not yet passed the Orb verification to reserve WLD tokens and redeem them at a certain point in the future. Enable as many people as possible to participate in Worldcoin, regardless of whether the Orb device is available.

This modification allows WLD that was originally unavailable to re-enter the market, increasing the number of WLD that can be sold in the next year. There is no public data available on the specific number of WLD tokens affected, but according to a tweet from Worldcoin, this change affects 6 million users.

TFH unlocking extension

Yesterday, Worldcoin announced again that the token lock-up period for early Worldcoin contributors to Tools for Humanity will be extended, and the token unlocking period for 80% of TFH investors and team members will be adjusted from two years to four years.

According to the original release plan, the TFH team and investors will unlock 3.19 million tokens per day, currently worth about $7.44 million. The revised daily unlocking is reduced to (319 × 80% ÷ 2 + 319 × 20%) = 1.914 million tokens, while the data given in the Worldcoin announcement is about 2 million tokens unlocked per day.

In summary, the token unlocking amount has dropped from 6.62 million tokens per day to about 5.4 million tokens, with no order of magnitude change.

Conclusion

Although this token release modification has not substantially reversed the continuous selling pressure of WLD, WLD has risen by 29% since the announcement. Worldcoin has also demonstrated its news trading ability many times in the past year. In theory, it should be "long short and short long". However, if the specific rules of World Chain give WLD actual use cases, the fundamentals will reverse again, which is worthy of readers' subsequent attention.

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