Worldcoin (WLD) has seen its value plummet by nearly 9% in just 24 hours, with the price settling at around $5.20. This decline aligns with a critical analysis issued by DeFi^2 (@DefiSquared), the current top trader on the crypt exchange Bybit, who has raised concerns about the potential for substantial inflationary pressures and misleading marketing associated with Worldcoin.
Notably, the WLD plunge comes just after OpenAI, the creator of ChatGPT, announced on Monday its plans to unveil a cutting-edge AI model named GPT-4o. This advanced model boasts the ability to engage in lifelike voice conversations and seamlessly interact across text and images. Worldcoin is usually a beneficiary of OpenAI announcements, but this time WLD price plunged.
Why Worldcoin Is Plummeting
In his analysis shared on X, DeFi^2 expounded on the mechanics behind the rapid devaluation of Worldcoin, emphasizing that the token is suffering from significant daily depreciation due to both emissions and strategic sales maneuvers by the Worldcoin Foundation.
Specifically, the token’s value is deteriorating at a rate of 0.6% each day, driven by the emissions related to grant and operator claims. These tokens, as per DeFi^2’s observation of on-chain analytics, are predominantly sold off almost immediately upon issuance, adding to the downward pressure on Worldcoin’s price.
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Adding to the supply concerns, the Worldcoin Foundation recently declared its intention to offload $200 million worth of Worldcoin to trading firms. This move will effectively increase the circulating supply by an additional 18%. DeFi^2 criticized this decision, pointing out that the tokens, misleadingly attributed to a “Community” allocation, are being sold at a discount to entities that may not prioritize the broader community’s interests, potentially diluting the value for existing holders.
The most critical issue highlighted by DeFi^2, however, pertains to the near future, when unlocks for venture capital and team-related tokens are set to begin. He forecasts that in just 70 days, the supply of Worldcoin will start to inflate at an alarming rate of 4% per day due to these unlocks combined with ongoing emissions. This scenario could unleash nearly $50 million worth of sell pressure daily, profoundly impacting the token’s market price and stability.
DeFi^2’s analysis did not shy away from addressing the perceived misconceptions surrounding Worldcoin’s…
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