Worldcoin's 'Money Grab' Plan: Price Manipulation, Misleading, and Unexpected Victims

Worldcoin ($WLD) has recently seen a significant price increase, rising about 45.1% over the past week. However, according to crypto researcher DeFi^2 on platform X, this surge is a deliberate act by the Worldcoin team to sell at high prices. Here are the details.

Worldcoin is expected to begin internal unlocking within 7 days, making it one of the cryptocurrencies with the lowest circulation in history, with only about 2.78% of tokens in circulation. Considering this, it is meaningful to delve into how the project achieved this state. This article reveals how the Worldcoin team secretly controls prices to maintain an FDV of about 30 billion dollars when internal unlocking begins.

First, some background. When Worldcoin was first launched, the foundation's circulating supply was 1.4%, or 140 million WLD. Although there were concerns that such a low circulation would lead to a very high FDV at launch, the team allocated 100 million $WLD to market makers and provided them with call options, allowing them to buy back a large number of tokens at a slightly higher price of 2 dollars at the end of the contract to prevent the price from soaring too high. Distributing supply to market makers to create favorable prices is not uncommon in the industry.

As expected, $WLD could not significantly exceed the bullish price during the contract period, as market makers would "suppress" the price. Worldcoin CEO Alex Blania also released a video discussing the special need for this contract to prevent price disruptions in the market:

Note his words, his goal was to avoid the price "soaring to 10 dollars," and he said that such a situation would be "terrible."

Nevertheless, on December 16, with a circulation of only 1.2%, Worldcoin decided not to renew the market maker contract, canceled the bullish options that suppressed the price, and even further removed an additional 25 million $WLD from circulation. At that time, with very low market maker participation, its market value was only 98 million dollars, and the price unsurprisingly soared by 100% within a few hours, which is exactly what Blania claimed they were trying to avoid.

Clearly, the team realized that publicly describing how they control prices was unwise, so when asked at Dubai Token2049 whether they were concerned about prices, Worldcoin's CEO claimed they could not control prices, as they were driven by the market:

But the reality is different. Only under the team's token economics design could an 11-digit valuation (tens of billions of dollars) be achieved, and the daily price movements of the token are often influenced by the team, as they actively change the unlocking volume, market maker contracts, and announcements before unlocking. This raises a question: why do they act this way?

Returning to the beginning of this article—when insiders unlock, the circulation is only 2.7%, which may be the lowest ratio seen in crypto history supported by major VCs during unlocking. Reminder, this may also be the only reason that $WLD could sustain an astonishing FDV of 30 billion dollars, and insiders could soon sell at this price. But why is the circulation so low? According to Blania in 2023, they must keep the circulation low because for UBI (Universal Basic Income), "releasing 10% of the supply at once is completely unfair":

But this is exactly what the team did with the unlocking, these tokens fell into the pockets of insiders, not the pockets of UBI recipients. Even with the new unlocking schedule, more than a year later, nearly 1 billion tokens will be sent to the team/VCs, and based on the current pace of UBI grants, only 600 million tokens have been allocated to UBI recipients. This means that within a year, the $WLD obtained by insiders is expected to account for more than 60% of Worldcoin's entire circulation (note: 10 divided by 16, about 62.5%). 60% is a large proportion, basically meaning that the ecosystem is purely for VC companies to sell off. This seems to directly contradict the current excuse of keeping the circulation low to benefit UBI.

There are also many other sources that increase circulation, and these supplies are not targeted at UBI recipients. Operators like Orb sometimes earn more than 20 thousand $WLD per week by collecting biometric data from vulnerable groups and send it directly to Binance:

With such low circulation, who are the current holders of nearly 30 billion dollars FDV, and who maintain high valuations during unlocking? Data shows that a large part is Korean retail investors, many of whom may not understand English and cannot comprehend the situation. At the time of writing this article, Bithumb holds nearly 25% of the circulation:

Considering this, it may not be a coincidence that Worldcoin waited until a week before unlocking to release positive news. Although this is just a small change to release selling pressure, it proved very effective, forcing retail investors to provide higher prices and more liquidity unknowingly, allowing insiders to exit within a week. Worse, it seems possible (but unconfirmed) that someone in the team or venture capital used insider information to buy in before the announcement was made public.

Although such behavior is not uncommon in the crypto field, many market participants still do not understand the secrets involved. This article aims to reveal a project that seems to be intentionally supporting a token price that should be lower, listing many reasons why the author intends to short $WLD in the months following the start of unlocking.