Worldcoin protocol and token
Digital identity is the foundation of the modern financial world: you can't open a bank or brokerage account without it. However, there are often privacy issues associated with data leakage.
What is Worldcoin?
Worldcoin is a decentralized open Web3-identity protocol created to give everyone access to the international financial system.
The project launched in July 2023 after two years of development with support from the Worldcoin Foundation and Tools of Humanity. Worldcoin's co-founder is Sam Altman, the founder of Open AI and behind the creation of the world's most popular chatbot, ChatGPT.
Worldcoin Foundation raised $115 million for the development of its project in a Series C investment round led by Blockchain Capital. Previously, the organization has also received funding from major funds such as:
- A16z,
- Coinbase Ventures,
- Digital Currency Group and others.
How does Worldcoin work?
The Worldcoin ecosystem includes three main elements:
- World ID is a digital identification system that uses specially designed devices called Orbs. Identification is used to prove identity on the blockchain (Proof of Humanity). The developers ensure that the World ID system keeps user data private;
- Worldcoin Token (WLD) — the project's native token, which will be discussed in more detail in the next section;
- World App is a custodial application designed for users' payments with WLD tokens and other digital assets.
The World ID global identity network is at the center of the Worldcoin ecosystem, where interaction with the project begins. Users must authenticate themselves (KYC or Know Your Customer) through retinal scans using Orb devices. Orb devices use multispectral sensors to verify identity. Once the procedure is complete and identity is confirmed, all stored images are deleted from the device to avoid risks of data leakage.
Worldcoin uses zero-disclosure proof-of-concept to protect privacy. In simple words, the identifiers only record the fact of identification itself, not the actual biometric data of users. However, the project has already been suspended in Kenya, India, Brazil, and France due to uncertainty about how exactly the company will store and protect sensitive data in the future.
Worldcoin solves at least two problems:
- A pervasive number of bots and scammers exploiting online services and harming these systems as well as the users themselves;
- Frequent data breaches are because users' sensitive information is insufficiently protected and often stored on servers vulnerable to attack.
Internet services will be able to use World ID to filter bots and scammers, and the use of cryptocurrency for these tasks can further reduce their number.
Worldcoin token
WLD is a native ERC-20 format utility token issued on the Ethereum blockchain. In addition to Ethereum, the WLD token is also used in the Optimism layer 2 network. The WLD token gives its holders voting rights, allowing them to participate in developing the Worldcoin ecosystem.
In addition, users can transfer WLD tokens, pay for goods and services with them, and make other payments available in the World App. The community has the right to independently determine the functions of the WLD token, so the scope of its application may expand in the future, in addition to management, transfers, and payments.
The first tokens can be obtained free of charge by users who have been identified through Orb devices, but this is only possible by physically visiting local operators. WLD token holders, except US residents, can claim regular airdrops.
According to the Worldcoin project tokenomics, 75% of the tokens have been allocated to the community. About 111 million WLDs have been issued, only 1.11% of the maximum token issue (10 billion).
In the first weeks after launch, Worldcoin's capitalization rose to $285 million before declining until September 2023. The fall was probably due to a local correction in the crypto market and mass sales of WLD tokens, which users received for passing identification. After that, the capitalization started to grow again and, as of January 2024, reached $311 million. This indicator ranks the WLD token 156th in the CoinMarketCap ranking.
The price of the WLD token is $2.78. Since September 2023, the token's rate has increased almost 2.8 times. The cost of WLD reached its all-time high (ATH) in December 2023 at $4.7. Relative to ATH, the WLD token is now trading 40% lower.
The WLD token is available for exchange on significant crypto exchanges, Binance, ByBit, OKX, Bitget, and others, as well as Uniswap and PancakeSwap decentralized exchanges.
What are the prospects for Worldcoin?
In January 2024, the Worldcoin project reached 500,000 users identified through Orb in Argentina alone, more than 1% of its population. Argentina has become the place where users are most interested in the project compared to other countries.
In addition, the project integrates with primary technological services such as the Telegram messenger and the popular game Minecraft. Worldcoin already supports the integration of such services as Discord and Talent Protocol, as well as platforms in the e-commerce segment Shopify and Mercado Libre. For example, Shopify uses World ID to prevent fraud on its platform and run advertising campaigns.
So far, Worldcoin has not yet achieved the same success as the recently launched Celestia, Mantle, and Sui. Still, demand for the project continues to grow steadily, and the company itself is expanding geographically and is already, for example, in talks with the Chinese government to provide services on their territory.
It is also worth considering that Sam Altman, one of the founders of ChatGPT, is behind the project; the number of users already exceeds 1.6 billion people. There is a possibility that ChatGPT will be integrated into Worldcoin, but there is no information about it yet. Experts believe that AI assistants will be using cryptocurrency as early as 2024.
