Tools for Humanity (TFH), the developer behind Worldcoin, has announced an extension to the lock-up period for WLD tokens allocated to team members and investors. This move alters the token distribution timeline, now scheduling the release of 2 million tokens daily starting from July 24, 2024, instead of the initially planned 3.3 million tokens per day.
Why Did Worldcoin Make This Decision?
The primary goal of this strategy is to manage market saturation and support the token’s value by controlling the token flow into the market. Consequently, this adjustment aims for a more measured increase in the circulating supply.
Following the announcement of the extended lock-up period, WLD’s price surged by 23% within the last 24 hours, reflecting positive investor sentiment. At present, WLD tokens are trading at $2.84, with a market capitalization of $784.9 million. However, the potential for selling pressure remains as the newly increased supply might prompt early investors to sell.
What Are the Long-Term Implications?
Extending the lock-up period from three to five years for 80% of the tokens is aimed at fortifying the stability of the Worldcoin ecosystem. The unlocking process is now set to span four years, concluding in July 2028, with the vesting schedule extended until 2029.
Key Takeaways for Investors
– The adjusted lock-up period may provide a more stable environment for token value.
– Short-term price increases could be followed by selling pressure due to increased supply.
– The long-term stability of Worldcoin’s ecosystem is a key focus, with extended lock-up periods.
Worldcoin’s tokenomics have been under scrutiny, especially because of its low circulation rate. According to a CoinGecko report, Worldcoin has the lowest circulation rate among the top 300 cryptocurrencies by market cap, standing at 0.02. This limited circulation may result in volatility with future token unlocks.
Nonetheless, interest in Worldcoin remains high, with over 6 million users possessing a World ID verified by the orb. This digital passport confirms the user’s humanity and allows access to the network. The allocation of WLD tokens to verified World ID holders remains unchanged, with over 211 million tokens claimed so far, accounting for more than 77% of the circulating 275 million WLD.