The cryptocurrency Worldcoin (WLD) has seen a massive price surge, surging 75% over the past five days, with a whopping 38% increase in the last 24 hours. According to DeFi^2 (@DefiSquared), the #1 ranked trader on Bybit and a top 10 wallet on DeBank, this price action is not just speculation but an indication of potential market manipulation, coinciding with upcoming insider unlocks.
Worldcoin Cash Takeover
in mail In a post published via X , DeFi^2’s top trader sheds light on some worrying details about Worldcoin’s market activity ahead of its planned internal token unlock. With only 2.7% of the total WLD supply currently in circulation, the smallest in the industry at the time of unlock, concerns center around how the Worldcoin team will be able to maintain a staggering $30 billion fully diluted valuation (FDV).
“Worldcoin is expected to start opening insider unlocks in 7 days at an all-time low in the industry,” DeFi^2 wrote. “This research piece highlights how the team is controlling the price to remain at a fully diluted $30 billion valuation as insider unlocks begin to open, while falsely claiming to have no role.”
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Worldcoin was initially launched with a circulating supply of 1.4%, or 140 million WLD. Of this supply, 100 million tokens were allocated to market makers with call options that allowed them to buy back a large number of tokens at a predetermined price of just over $2. The strategic goal of this was to discourage any sudden price spikes.
On The Scoop Podcast, Worldcoin CEO Alex Plania discussed these tactics candidly, noting that they were crucial in preventing the price from spiking, which could disrupt the market. “The intent to avoid a price spike to $10 is critical, because such an event would be terrible for our strategic position in the market,” Plania explained.
However, by December 16, the situation changed dramatically when Worldcoin opted not to renew its market maker contract. This resulted in the removal of the call option and a simultaneous drop in WLD trading by an additional 25 million tokens. The immediate aftermath saw the price double within hours, a scenario that Plania had previously indicated the company intended to avoid.
During the Token2049 conference in Dubai, Plania stressed that Worldcoin does not manipulate market prices, attributing the volatility to natural market forces. This statement stands in stark contrast to the clear impact of the team’s strategic decisions regarding token economics and market maker contracts.
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DeFi^2 emphasized that “the 11-figure valuation is only possible due to the team’s deliberate design of the token’s economics, and daily price movements were often influenced by timely announcements and policy adjustments made by the team.”
market manipulation
Worldcoin’s framework, ostensibly designed to facilitate universal basic income (UBI), appears to primarily benefit insiders rather than intended beneficiaries. Current projections show that roughly 1 billion tokens are set to be issued to team members and venture capitalists within the next year, while only about 600 million tokens are expected to be distributed to UBI beneficiaries in the same timeframe.
“This means that within a year, internally issued WLD is expected to make up over 60% of the total circulating supply of Worldcoin. 60% is a wild percentage – it basically means that the majority of the ecosystem exists purely for venture capital to mop up. This seems to directly contradict the justification that the float is now being left low for the benefit of UBI recipients,” the trader writes.
Orb operators, tasked with collecting biometric data, have also been a significant source of circulating supply, with some reportedly sending upwards of 20,000 WLD per week to exchanges like Binance. This situation became particularly evident when the price of WLD surged to $12 in March, with large amounts of WLD being moved to exchanges every few days.
Retail investors, especially in Korea, where around 25% of the circulating supply is held, are even more vulnerable. Many of these investors are likely unaware of the complex dynamics at play, as they hold tokens with an FDV of around $30 billion, a value supported by positive news that was strategically released a week before the coin’s launch.
“It’s probably no coincidence that Worldcoin waited until a week before launch to release positive news. While it’s only a small change to trigger selling pressure, the news has so far proven incredibly effective in forcing retail to inadvertently 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 VCs used inside information to advance the purchase of the news before it was publicly announced,” @DefiSquared claims.
He concludes with a stern warning: “This piece aims to highlight a project that appears to be intentionally supporting a token price that should be lower, and many of the reasons outlined are why I intend to short WLD in the months following the start of the open.”
At the time of publishing this report, WLD was trading at $3.22.
Featured image from Kucoin, chart from TradingView.com