Benzinga - Renowned Bybit trader DeFi^2 raised concerns about Worldcoin’s (CRYPTO: WLD) long-term viability and potential for aggressive short-selling, arguing that Worldcoin’s “universal basic income” mission statement masks a wealth transfer benefiting insiders.
What Happened: According to the trader’s analysis, the coin may be facing a grim future:
“Worldcoin realistically might become the greatest transfer of wealth of this entire cycle. Unfortunately, this wealth transfer isn’t in the form of universal basic income as their mission suggests, but instead to the pockets of the team and insiders,” DeFi^2 expressed in a cautionary post.
This criticism highlights a growing skepticism about the project’s objectives and its operational transparency.
DeFi^2 outlined specific details that suggest the possibility of aggressive short-selling due to the project’s tokenomics and insider activities.
“At its current $60 billion fully diluted valuation, right now it is being devalued by 0.6% a day from emissions of grant and operator claims,” he noted, pointing out that these claims are mostly sold immediately upon release, as indicated by on-chain analytics.
Moreover, the Worldcoin Foundation‘s recent decision to sell $200 million worth of tokens to trading firms—which amounts to 18% of the circulating supply—raises alarms about the potential dilution of value for existing holders.
These tokens, sourced from what is ambiguously termed the “Community” allocation, seem to be strategically offloaded to entities that might not prioritize community interests.
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The concern doesn't stop there, as DeFi^2 warns of an upcoming period where venture capital and team unlocks that could dramatically increase the supply: “In just 70 days… WLD supply will begin inflating at 4% PER DAY from unlocks + emissions.”
This could translate to nearly $50 million a day of continuous sell pressure, a scenario that could devastate the coin’s market value.
Accusations of predatory financial arrangements were starkly put forth, likening Worldcoin's strategies to those previously seen in notorious market manipulations.
“The manipulative low float/high FDV design is straight out of the SBF playbook, and directly enriches insiders as they hedge their locked allocations at high valuations pre-unlock via perps/OTC,” DeFi^2 remarked.
Most concerning is the misconception held by retail investors about the affiliations and endorsements of the project.
Many are unaware that Sam Altman, often associated with leading tech innovations, has no active involvement with Worldcoin, which also has no connection to OpenAI.
What’s Next: As the cryptocurrency community braces for these developments, these concerns are likely to be a topic of intense discussion at the upcoming Benzinga's Future of Digital Assets event on Nov. 19.
This event will provide a platform for experts to delve deeper into the impacts of market strategies like those employed by Worldcoin, exploring the broader implications for investors and the integrity of the digital asset space.
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