Worldcoin, once a headline-grabbing cryptocurrency with its futuristic vision, is now at the center of turmoil. This time, it’s the struggles that are making the news, not the innovations. At the center of this storm is Sam Altman, of the cryptocurrency project OpenAI, as the project struggles to achieve its ambitious goal of creating a global digital identification system.
Concerns over token dilution, market manipulation, and legal hurdles have led to the project — which was intended to Iris scanning for digital identities And rewarding participants with free WLD tokens – which is under close investigation.
The dilemma of mitigation
The crypto community has been vocal against Worldcoin’s token economy policy. With only 2.7% of the total WLD tokens in circulation, the project’s diluted market cap is $22.4 billion, while its current value is $648 million.
This discrepancy highlights the serious risk of token dilution. As more tokens become available and each token becomes less valuable, existing investors find themselves in a precarious position. The fact that even a fraction of the total amount being exchanged exacerbates the problem, as pumping a large number of tokens can have a significant impact on the market price.
WLDUSD trading at $1.98 on the daily chart: TradingView.com
Allegations of market manipulation
Allegations of insider trading and market manipulation are raising concerns. DeFi square, One on-chain expert believes that Worldcoin’s management could influence the token’s price by controlling release dates and timing positive news with unlock events.
The allegation is that the market makers obtained 100 million tokens to create favorable conditions that would have allowed the project team to maintain a high value for the project despite market realities. Although a Worldcoin representative denies these accusations, the allegations have tarnished the credibility of the initiative.
Global concerns and legal difficulties
In addition to its misery, legislative hurdles stand in the way of Worldcoin. Prospects for global growth. Due to security concerns and the processing of biometric data, some countries have permanently or temporarily banned the program.
A man has his eyes scanned by a Worldcoin orb. Source: Rest of World.
WorldCoin’s inability to serve China, India, and the United States makes it difficult to achieve its ambitious user acquisition goals. WorldCoin had been aiming to sign up 1 billion users by 2023, but legal issues have slowed expansion, casting doubt on its long-term sustainability.
long term survival
WorldCoin’s long-term survival in these turbulent waters is uncertain. Tight regulations, allegations of market manipulation, and difficulties in diluting tokens threaten WorldCoin’s goal of developing a global digital identity system.
Although digital identity management provides a lot of room for creativity, Worldcoin must solve these critical challenges to be relevant in the rapidly changing world of cryptocurrencies and blockchain technology.
Featured image from Fortune, chart from TradingView
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