analysis company warns that the project’s tokenomics are worrying By CriptoFácil

2023-07-27 23:10:10

Worldcoin: Analyst firm warns project tokenomics worrisome

CriptoFácil – Renowned cryptocurrency analytics firm Kaiko has raised concerns about the complexity of Worldcoin tokenomics (WLD). According to the company’s analysis, Worldcoin’s tokenomics, which refers to the economics and incentive system behind a cryptocurrency, is quite confusing.

Worldcoin is a project developed on the network that aims to create a global identity network through a specialized device called Orb that scans the iris.

The project is an initiative of Sam Altman, creator of ChatGPT, and proposes a kind of universal basic income that is received when participating in the network.

Kaiko revealed in its report that despite its analysis of the Worldcoin white paper, various parts of the Worldcoin tokenomics scheme remain opaque.

“Unfortunately, Worldcoin is not unique in that its tokenomics are quite confusing, with distinctions between ‘circulating’ and ‘unlocked’ supply […]various inflation rates and premiums, and unclear language,” warned a Kaiko analyst.

Worldcoin

The analysis also underscored that Worldcoin’s governance will decide the rate at which new tokens enter circulation after the initial distribution of 10 billion units, adding a layer of uncertainty to the already complex structure of the new cryptocurrency.

Furthermore, Kaiko noted that, unlike many other cryptocurrencies, WLD was listed on exchanges in an orderly fashion and in record time.

“A few minutes after launch, it was already on the main exchanges in the world, such as Binance, Bybit, OKX, Uniswap and Huobi”, detailed Kaiko.

The analytics firm further highlighted the role of market makers in keeping WLD highly liquid on exchanges.

Almost all of the current circulation of WLD is in the hands of these market makers who, by consistently quoting bid and ask prices, provide liquidity to the market and reduce volatility.

However, Kaiko warns that despite this initial liquidity of the WLD, the Worldcoin structure may present challenges in the long term. The uncertainty surrounding its economic structure, along with doubts about what will happen after the initial distribution of 10 billion units, creates a series of questions with no clear answers.

By CriptoFacil