The Worldcoin Foundation has recently announced its plans to phase out USDC rewards in favor of Worldcoin (WLD) token rewards for its Orb operators by early November. This strategic shift marks the culmination of a transition phase initiated on October 10, 2023, for Worldcoin operators.
Transition to WLD Token Rewards
The decision to transition from USDC to WLD token rewards is aimed at streamlining the reward distribution process. However, it comes with a unique twist: the reward distribution will vary depending on the availability of the WLD token in different jurisdictions worldwide. While this approach may seem unconventional, it’s in line with the Foundation’s vision for a decentralized and accessible cryptocurrency.
To facilitate this transition, the Foundation has already distributed $53 million worth of WLD as user grants. Additionally, they’ve extended loans of $156 million to global market makers. These market makers play a crucial role in the token’s liquidity, and their participation is vital to Worldcoin’s success.
Market-Makers and WLD Liquidity
Worldcoin’s subsidiary, World Assets, has taken an assertive stance by requiring market makers to either return or purchase WLD tokens received. This move is designed to enhance the token’s liquidity, especially in regions outside the United States. Market makers are under a tight deadline, with a mandate to pay for or return the remaining 25 million tokens, equivalent to $38 million, by an upcoming Tuesday. This commitment extends even further, with loan agreements set to continue until December 15, 2023.
The Worldcoin Foundation has a distinctive approach to cryptocurrency distribution. Their primary objective is to issue cryptocurrency to individuals who can validate their “humanness” using a cutting-edge photographic device known as the Orb. Operating in over 35 cities, independent contractors use the Orb to link a unique code from Worldcoin’s World app to a person’s retina scan, ensuring a one-to-one correlation between a person and their World ID.
Upon its launch, WLD raised concerns about the concentration of its supply in the hands of market makers. According to the project’s white paper, this was a deliberate strategy aimed at creating a network of as many human beings as possible. The Foundation has reiterated its commitment to gradually distribute the majority of the WLD token supply to new and existing users over the coming years.
Regulatory Scrutiny and Data Privacy Concerns
While Worldcoin’s innovative approach has garnered attention and interest, it has also raised concerns among regulators and privacy watchdogs. The project’s use of iris scanning technology has been met with skepticism, prompting regulatory actions in various countries, including Kenya, Germany, France, and the UK. The Foundation contends that their use of zero-knowledge technology and fraud proofs ensures user data privacy, but the debate rages on.
Ethereum co-founder Vitalik Buterin has called for Worldcoin to open-source its technologies and subject them to audits to ensure the project always acts in the best interests of its users. As the transition from USDC to WLD rewards nears completion, the Worldcoin Foundation faces both technical and regulatory challenges as it pursues its unique vision of a more inclusive cryptocurrency ecosystem.