Worldcoin was launched by Alex Blania and Sam Altman on July 24th, 2023, just half a year after the debut of ChatGPT. The project aims to establish a decentralized identity and financial network and to distinguish humans from AI in a future increasingly dominated by artificial intelligence, through a concept known as proof of personhood. The Worldcoin ecosystem consists of three main elements: WorldID, which serves as a digital passport on the internet; Worldcoin (WLD), the project’s native token; and WorldApp, where users can authenticate their proof of personhood with WorldID. After completing the verification process, users can prove that they are human, not bots or AI, and proceed with various actions such as logging into apps. In the following sections, we’ll dive into the details of how proof of personhood works.
The Orb is the device that scans users’ irises to establish proof of personhood. Like fingerprints, each individual has a unique iris. The Orb scans the iris and converts it into an iris code for Worldcoin verification. This system is the foundation of Worldcoin, ensuring that the user is a real and unique human, not a bot. New users must visit an Orb location to get their WorldID verified. At the time of my research, there are 234 Orb locations across 11 countries and 4 continents.
There are three levels of WorldID verification. The first level is WorldID Device, which is for WorldIDs that are registered on the WorldApp but not verified by an Orb. The second level is WorldID Orb, for users who have had their iris scanned by an Orb. The third level is WorldID Orb+, which includes an additional face authentication, similar to Face ID, on top of the iris scan. This level fully proves that the user is a unique person with enhanced security. After verification, users can use their identity to log into apps like Discord, Shopify, Minecraft, and others. Currently, over 6 million users have Orb-verified WorldIDs.
However, there are concerns about data privacy. Many European countries have banned Worldcoin due to concerns over the collection of people’s iris data. Worldcoin claims that they verify proof of personhood without actually processing the user’s iris information. Additionally, users have full control over their personal data and can delete it if they choose. Another concern is the potential for the Orb to be hacked, leading to personal data leaks. According to their white paper, the Worldcoin team is continually updating the security of the Orb.
Tokennomics:
The total supply of WLD is 10 billion. The distribution is as follows:
- 75% for the Worldcoin Community
- 9.8% for the Initial Development Team
- 13.5% for TFH Investors
- 1.7% for TFH Reserve
In the first year, fewer than 2 billion WLD will be released. A significant release of WLD tokens is expected after year 3, which could lead to serious inflation problems. Currently, there are only a little over 300 millions WLD circulating in CEXs.
Airdrops are available to verified WorldID holders. After the initial verification, users receive some WLD as a reward. Each month thereafter, they can receive 6 WLD through the airdrop program, at the time of this research. The amount of WLD rewarded is subject to change.
Summary:
In brief, Worldcoin presents an interesting concept with its decentralized identity verification system. However, in my opinion, it is challenging for Worldcoin to become valuable and practical for users. At the end of the day, most of the 6 million verified users likely scanned their irises for the airdrop rewards. Currently, there is no demand for WLD tokens, WLD holders are all waiting to sell them. In addition, as more WLD is released and circulates in the market, the price could drop significantly. Without the incentive of airdrops, it is questionable whether people will continue to scan their irises for proof of personhood.