The Worldcoin (WLD) cryptocurrency has seen a dramatic price boost, surging by 75% in the past five days, with a significant boost of 38% in the past 24 hours. According to DeFi^2 (@DefiSquared), a top trader on Bybit and a top 10 portfolio on DeBank, this price movement is not merely speculative, but indicates potential market manipulation, in sync with the upcoming insider unlocks.
Cashing in on Worldcoin
IN fasting Shared via X, a leading DeFi^2 trader has revealed some disturbing details about Worldcoin’s market activity ahead of the planned unlock of insider tokens. With just 2.7% of WLD’s total supply currently in circulation, the smallest percentage in the industry at the time of unlock, concerns center on how the Worldcoin team has managed to maintain a staggering fully diluted valuation (FDV) of $30 billion.
“Worldcoin is set to begin insider unlocking in 7 days at one of the lowest levels in industry history,” DeFi^2 wrote. “This research paper reveals exactly how the team is controlling price to continue to maintain a fully diluted valuation of $30 billion when insider unlocking begins, while falsely claiming they have nothing to do with it.”
Worldcoin was initially launched with 1.4% of the circulating supply, or 140 million WLD. Of this, 100 million tokens were allocated to market makers with call options that allowed them to buy back a significant amount of tokens at a set price of just over $2. This was intended to strategically dampen sudden price spikes.
On “The Scoop Podcast,” Alex Blania, CEO of Worldcoin, openly discussed these tactics, stating that they were key in preventing a price spike that could potentially disrupt the market. “The intent of avoiding a spike to $10,” Blania explained, “is paramount because that would be a terrifying event for our strategic market positioning.”
However, on December 16, things took a drastic turn when Worldcoin decided not to renew its market maker contract. This led to the removal of the call option and the simultaneous reduction of WLD’s circulation by an additional 25 million tokens. The immediate aftermath of this event was a doubling of the price within hours, which according to Blania was a scenario the company intended to avoid.
During the Token2049 conference in Dubai, Blania reiterated that Worldcoin does not manipulate market prices, attributing fluctuations to natural market forces. This statement starkly contradicts the obvious implications of the team’s strategic decisions regarding tokenomics and market maker contracts.
DeFi^2 emphasizes that “the 11-figure valuation is only possible due to the team’s thoughtful tokenomics design, and daily price fluctuations often depend on well-planned announcements and policy changes made by the team.”
Market Manipulation
Worldcoin’s structure, which was supposedly designed to facilitate a universal basic income (UBI), appears to primarily benefit insiders rather than its intended recipients. Current projections show that nearly a billion tokens are earmarked for issuance to team members and venture capitalists over the next year, while only about 600 million tokens are expected to be distributed to UBI recipients in the same time frame.
“This means that within a year, insider-issued WLD is expected to make up over 60% of the total circulating supply of Worldcoin. 60% is an insane proportion — it essentially means that most of the ecosystem exists solely for VCs to sell off. This seems to directly contradict the rationale that the float is currently low to benefit the recipient of UBI,” the trader writes.
Orb operators tasked with collecting biometric data were also a significant source of circulating supply, with some reportedly sending over 20,000 WLD per week to exchanges like Binance. This became especially evident when the WLD price rose to $12 in March, with significant amounts of WLD being moved to exchanges every few days.
Retail investors, especially in Korea, where 25% of the circulating supply is held, are increasingly vulnerable. Many of these investors are likely unaware of the elaborate dynamics at play, holding the tokens at nearly $30 billion FDV, a valuation supported by positive news strategically released a week before the unlock.
“It’s likely no coincidence that Worldcoin waited a week before the unblock to release positive news. Despite it being just a minor change in the unblock selling pressure, the news has proven extremely effective so far in forcing retail trading to unknowingly offer higher prices and more liquidity for insiders to exit within a week. Worse, it seems likely (but not proven) that someone on the team or VC used insider information to preemptively buy the news before it was publicly announced,” claims @DefiSquared.
He ends with a stern warning: “This article aims to shine a light on a project that is clearly intentionally propping up a token price that should be lower, and many of the reasons presented are why I intend to short WLD in the months following the unlock.”
At the time of going to press, WLD’s share price was $3.22.
Featured image from Kucoin, Chart from TradingView.com
