Tools for Humanity (TFH), the developer of Worldcoin, has extended the lock-up period for WLD tokens designated for team members and investors. This strategic decision has adjusted the token distribution schedule, reducing the daily release to 2 million tokens starting from July 24, 2024, down from the originally planned 3.3 million tokens per day. Worldcoin has seen a remarkable 23% surge in its value recently.
The revised strategy aims to reduce market saturation and bolster the token’s value. This adjustment is intended to control the influx of tokens into the market, facilitating a more gradual increase in circulating supply.
In response to this development, WLD’s price surged by 23% in the past 24 hours, indicating positive investor sentiment. Currently, WLD is trading at $2.84, with a market capitalization of $784.9 million.
The extended lock-up period, now spanning from three to five years for 80% of the tokens, aims to enhance stability within the Worldcoin ecosystem. This adjustment, which stretches the unlocking process over four years ending in July 2028, with vesting continuing into 2029, seeks to mitigate potential selling pressure and support long-term value.
Following the news of the extended unlock schedule, HumaCapital noted significant shorting activity on WLD, suggesting ongoing market volatility. According to Vincent Maliepaard, Marketing Director at IntoTheBlock, the structure of token unlocks, whether linear or cliff-based, plays a crucial role in influencing asset prices. Linear unlocks typically distribute market impact over time, while cliff unlocks can lead to abrupt price shifts. Investors are advised to monitor these schedules closely to gauge growth potential and adjust their investment strategies accordingly.
Worldcoin’s tokenomics have come under scrutiny, especially regarding its low float ratio. According to a CoinGecko report, Worldcoin ranks lowest among the top 300 cryptocurrencies by market capitalization, with a float ratio of just 0.02. This minimal ratio indicates a scarcity of tokens in circulation, which could contribute to increased volatility as more tokens unlock in the future.
Despite concerns, Worldcoin maintains its appeal, drawing users to its network. Presently, more than 6 million individuals possess an orb-verified World ID, a digital passport verifying human identity and enabling network access.
The distribution of WLD tokens to verified World ID holders remains unchanged, with over 211 million tokens claimed so far. This constitutes more than 77% of the 275 million WLD tokens currently in circulation.