Worldcoin, backed by OpenAI, employs iris scans for digital identification, raising privacy and security concerns. The token economy, including market maker control and increased insider allocations, is contentious. Ethical issues have arisen with Worldcoin incorporation practices, especially in developing countries.
OpenAI CEO Sam Altman is no stranger to ambitious companies. As a pivotal figure in the world of technology, his recent foray into cryptocurrency, Worldcoin (WLD), has been one of the most scrutinized launches.
While Worldcoin has already sparked interest from investors around the world, recent revelations about its operations, the token economy, and potential risks have drawn attention.
Market Makers Control 95% of WLD Supply
Worldcoin was designed as a digital identification platform to differentiate real humans from bots or artificial intelligence (AI) algorithms. His main tool, the Orb, is an iris-scanning device to ensure that every person on the internet is unique.
With such an innovative proposition come inherent challenges, some of which may even border on ethical and practical gray areas. One of the first concerns that arose after the launch revolved around the token economy. Upon its debut, the circulating supply of Worldcoin stood at 143 million tokens. This included an airdrop of 43 million WLD and 100 million WLD loaned to non-US market makers for three months.
“The WLD token starts with a relatively low circulating supply of a maximum of 143 [million] WLD (i.e. 1.43% of the initial total supply). This is due to the goal of creating a network of as many human beings as possible, and to achieve this, the majority of the WLD token supply will be delivered to new and existing users in the coming years.”
A closer look at the data reveals that market makers control 95% of the total circulating supply at launch, leading to an initial market imbalance.
Given that the price was incentivized to open above a fully diluted value (FDV) of $28 billion, WLD was quick to rise. According to Matt Batsinelas, a general partner at Triblock, this is reminiscent of earlier high-profile tokens like Filecoin (FIL) and Internet Computer (ICP).
Worldcoin’s Iris Scan Raises Privacy Concerns
Beyond the technical complexities, what really set off alarm bells was Worldcoin’s method of user onboarding. The team frequently celebrated its large user base, which was not inherently problematic. However, revelations about its potentially exploitative practices in developing countries, as reported by MIT Technology Review, painted a troubling picture.
The real bone of contention is the use of iris scanners. While the Worldcoin team insists that iris images are removed after scanning and only the uniqueness of the iris pattern is stored, critics argue that there are substantial risks involved.
“We want to make it very clear that Worldcoin is not a data company and our business model does not involve exploiting or selling users’ personal data. Worldcoin is only interested in the uniqueness of a user, meaning that they have not registered with Worldcoin before, not their identity,” the company said in a 25-page response to MIT Technology Review.
While Worldcoin assures users that it is not a data company and has no intention of exploiting users’ personal data, its method of onboarding, especially in developing regions, says otherwise.
Worldcoin walks a fine line between revolutionizing digital identity and veering off into potential mistakes, as many disruptive innovations do. Only time will tell if his promise can live up to his ambitions while maintaining confidence and security.
By Audy Castaneda
