Worldcoin is facing significant risks of market capitalization devaluation as its native token, WLD, experiences dilution concerns. Currently trading at $2.47, WLD has seen a 4.5% decline in the last 24 hours.
Since its launch in July 2023, Worldcoin, a blockchain project developed by ChatGPT-maker OpenAI, has quickly climbed the ranks to become one of the top 100 digital assets by market capitalization. However, the project is now encountering potential devaluation issues due to the small portion of its total token supply that is currently in circulation.
Data from IntoTheBlock highlights an increased risk of dilution in WLD’s market cap over time. The report suggests that future token unlocks could lead to significant losses for holders. To illustrate the impact of lower circulation on prices, IntoTheBlock provided an example of a hypothetical cryptocurrency priced at $1 with only 10% of its total supply in circulation. They explained that as more tokens enter circulation, the value of each token can get diluted unless there is a corresponding increase in overall demand.
As per CoinMarketCap, WLD’s current circulating supply is 283 million, while the total supply is an overwhelming 10 billion. Despite the recent price drop, WLD has risen by 29.78% over the past seven days.
The blockchain community has also taken notice. Blockchain detective ZachXBT recently labeled Worldcoin the “biggest scam of the bull run” on X (formerly Twitter), pointing to upcoming insider unlocking events. Similarly, Crypto Banter host Ran Neuner warned investors about the risks of investing in WLD.
In summary, while Worldcoin has gained substantial traction, the looming risk of dilution due to its low circulating supply could pose significant challenges for the token's future value. Investors should remain cautious and closely monitor upcoming developments.
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