Worldcoin 'Money Heist” Scheme: Price Fixing, Misinformation, and Unexpected Victims

Compiled by: Felix, PANews

The price of Worldcoin (WLD) has increased significantly recently, rising by approximately 45.1% in the past week. However, according to an article published by encryption researcher DeFi^2 on the Below are the content details.

Worldcoin, which is expected to begin internal unlocking within 7 days, has one of the lowest circulating coins ever in the crypto industry, with only about 2.78% of coins in circulation. With this in mind, it makes sense to take a deeper look at how projects achieve this state. This article reveals how the Worldcoin team secretly controls the price in order to still maintain around $30 billion in FDV when the internal unlock begins.

First some background. When Worldcoin was first launched, the foundation’s circulating supply was 1.4%, or 140 million WLD. While there were concerns that such low circulation would cause it to launch at an extremely high FDV, the team has allocated 100 million of those WLDs to market makers and provided them with call options, allowing them to end the contract at slightly higher prices. Buying back large amounts of tokens at prices above $2 is intended to prevent prices from surging too high. Allocating supply to market makers to create favorable prices is not uncommon in the industry.

2023年旧的Worldcoin白皮书描述了向做市商提供的价格抑制公式

As one would expect, WLD is unable to significantly exceed the call price during the life of the contract because the market makers "suppress" the price. Worldcoin CEO Alex Blania also posted a video discussing the specific need for this contract to prevent prices from disrupting the market:

<em>Worldcoin</em><em>首席执行官介绍了他们抑制价格以避免</em><em>WLD</em><em>飙升至</em><em>10</em><em>美元的技术。同年晚些时候，他们拒绝续签合同，</em><em>WLD</em><em>飙升至</em><em>10</em><em>美元。（来源：</em><em>The Scoop Podcast</em><em>）</em>

Please note his words, his intention is to avoid the price "surge to $10", and then Said such a situation would be "terrible".

Nonetheless, on December 16, with only 1.2% of the circulating supply, Worldcoin decided not to renew the market maker contract, canceled the price-suppressing call options, and even further removed an additional 25 million from circulation. WLD. At the time, with minimal market maker participation and a market capitalization of just $98 million, the price predictably soared 100% in a matter of hours, which is exactly what Blania claimed they were trying to avoid.

Apparently, the team realized it would be unwise to publicly describe how they control the price, so when asked at Dubai Token2049 if they were paying attention to the price, the Worldcoin CEO claimed they had no control over the price and it was driven by the market:

<img src="/static/imghwm/default1.png" data-src="https://img.php.cn/upload/article/000/000/000/172139366081415.png?x-oss-process=image/resize,p_40" class="lazy" alt="Worldcoin Money Heist” Scheme: Price Fixing, Misinformation, and Unexpected Victims">Worldcoin首席执行官称，尽管他们采取行动改变政策和代币经济学，对价格有明显的影响，但他们与价格关系不大

But that’s not the case. An 11-digit (tens of billions of dollars) valuation is only possible due to the team’s token economics design, and the token’s daily price movements are in many cases influenced by the team’s proactive approach to unlocking Volume, market maker contracts, and pre-unlock announcements will be changed. This begs the question: Why do they act the way they do?

Back to where this article started - at the time of the insider unlock, the circulating supply was only 2.7%, which is probably the lowest rate ever seen in crypto history for a major VC-backed unlock. As a reminder, this may also be the only thing keeping WLD afloat at a staggering $30 billion FDV, which insiders could soon sell for. But why is circulation so low? According to Blania in 2023, they have to keep the circulating supply low because for the sake of UBI (Universal Basic Income) "it would be completely unfair to release 10% of the supply all at once":

<img src="/static/imghwm/default1.png" data-src="https://img.php.cn/upload/article/000/000/000/172139366668899.png?x-oss-process=image/resize,p_40" class="lazy" alt="Worldcoin Money Heist” Scheme: Price Fixing, Misinformation, and Unexpected Victims">Worldcoin首席执行官为低流通量辩护，声称这是为了UBI。令人困惑的是，该团队设计的代币经济学，导致一年后大部分发行都流向内部人员，而不是UBI。（来源：The Scoop Podcast）

But that's exactly what it is What the team did with the unlocking was that the tokens went into the pockets of insiders, not the UBI recipients. Even with the new unlocking schedule, over a year from now, nearly 1 billion tokens will have been sent to teams/VCs, and extrapolating from the current pace of UBI grants, only 600 million tokens have been allocated to UBI recipients . This means that within one year, the WLD obtained by insiders is expected to account for more than 60% of Worldcoin's entire circulation (note: 10 divided by 16, approximately 62.5%). 60% is a large percentage and basically means the ecosystem is purely for VC firms to sell. This seems to directly refute the current excuse for keeping circulation low to benefit UBI.

There are many other sources adding to circulation, these supplies are also not targeted at UBI recipients. Operators like Orb sometimes earn over 20,000 WLD per week by collecting biometric data from vulnerable people and sending it directly to Binance:

当WLD价格在3月份飙升至12美元时，Orb运营商每3天向币安发送近15万美元的WLD

With circulation so low, who is currently A victim of holding nearly $30 billion in FDV and maintaining a high valuation when unlocked? Data shows that a large part of them are Korean retail investors, and many of them may not even be able to read English, let alone understand the situation. At the time of writing, Bithumb holds nearly 25% of circulating supply:

随着内部解锁的临近，韩国散户在Bithumb上持有的WLD数量持续增长。由于Worldcoin Foundation积极出售代币，这些资产中的大部分在最近几个月已经贬值70-80%（来源：Arkham Intelligence）

考虑到这一点，Worldcoin等到解锁前一周才发布利好消息可能并非巧合。尽管这只是一个释放抛售压力的小变化，但事实证明该消息非常有效，迫使散户在不知情的情况下提供更高的价格和更多的流动性，让内部人士在一周内退出。更糟糕的是，似乎有可能（但未经证实）在团队或风险投资中，有人利用内幕消息，在公告公开之前抢先买入。

图表显示，在解锁延期消息发布前24小时内，价格巧合飙升

尽管这样的行为在加密领域并不少见，但许多市场参与者仍然不了解其中秘辛。本文旨在揭示一个似乎有意支撑本应代币价格较低的项目，其中列出的许多原因就是为什么作者打算在解锁开始后的几个月内做空WLD。

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