Since its launch, Worldcoin has been daunting with its extremely high FDV, and even triggered a long-lasting discussion on whether FDV is a meme.

After the baptism of various high FDV/low circulation market value tokens in the first half of this year, we now know that FDV is not a meme. High FDV means a big cut!

But there are ways to cut a big cut. When the internal unlocking was about to begin, Worldcoin suddenly announced at 9 pm on July 16 that the unlocking period of tokens allocated to team members and investors of the development company Tools for Humanity would be extended from 3 years to 5 years.

Just this simple announcement caused WLD to rise from 2.1 to a maximum of 3.2 within 24 hours, an increase of more than 50%. Some people think that this is an epic positive, and WLD will still rise; others think that this is just a cannon by the dealer to facilitate the unlocking and shipping.

Just when everyone was at a loss, a top trader @DefiSquared (hereinafter referred to as Brother D) took action. At 5:30 pm on July 17, he released his most comprehensive research report on Worldcoin to date, "Worldcoin Money-making Plan Part 2: Price Manipulation, Misleading Propaganda and Accidental Victims".

This is not the first time he has published a research post about Worldcoin. He has been following up on this project since Wolrdcoin went online on July 24, 2023. And every time he publishes the results of his investigation, it is on the eve of the drastic fluctuations in the price of WLD. It can be said that he has witnessed the prosperity of Wolrdcoin, and foresaw that the inherent defects of this project will inevitably lead to its destruction. What he plans to do now is to push this project into the abyss with his own hands.

BlockBeats will combine his previous investigation reports to tell you the love-hate relationship of this top trader with Worldcoin.

First investigation: confusing token economics

On July 24, 2023, the Worldcoin protocol was officially launched on the OP (formerly Optimism) mainnet. WLD was immediately listed on top CEXs such as Binance and OKX and stabilized its price above $2.

From the first day, the confusing economics of Worldcoin's tokens confused Brother D, a top trader. He asked on social media: "Worldcoin distributed about 25 WLD tokens to each of the 90,000 participants, and a total of 2.25 million were distributed to the global community. So, who is selling orders of 400,000 WLD, equivalent to 20% of the entire global community supply? Can anyone provide more information about today's token distribution or where this supply came from?"

The picture attached by Brother D shows that someone set a sell order for 397,400 WLD at $2.83.

In the comments section, Blue Fox, Wintermute CEO Evgeny Gaevoy gave the answer: These are the tokens that Wolrdcoin lends to "experienced participants in the financial markets." The large order of 400,000 WLD above is Wolrdcoin's market maker "making the market." And how many tokens do market makers have in total? According to CoinDesk's report on the same day, Worldcoin stated that the maximum circulating supply of WLD at launch is 143 million. Of these, 43 million will be allocated to users who have completed verification before launch, and another 100 million will be provided to non-US market makers in the form of loans due in three months.

But what's interesting is that according to the Optimism browser data that BlockBeats checked on the same day, the maximum supply of WLD-Optimism reached 175,500,064 when it was launched, which is 32 million more than the official said. It can be said that from the first day, the token economics of Worldcoin was full of doubts.

In addition, Brother D specifically quoted a netizen's comment on the "market maker agreement", saying that this aroused his interest. It turns out that the market maker agreement of the WLD token allows them to buy back the tokens they sold at a price slightly higher than $2 at the end of the contract three months later, so that they can sell the tokens arbitrarily above $2 to lock in profits. This is why the price of WLD on CEX can always be stable above $2. It was this discovery that allowed Brother D to accurately bet on the first price surge of WLD in mid-December 2023.

Second investigation: the first high FDV/low circulation plate in 2023

As mentioned earlier, Worldcoin's market maker agreement aroused Brother D's interest. However, at the end of October, Worldcoin issued an announcement on the extension of the market maker agreement, which did not attract his attention. We will add it here.

In short, Worldcoin extended the original three-month market maker agreement by another two months. The five market makers only need to repay 25 million WLD on October 24, and the remaining 75 million will be repaid on December 15.

On December 16, the above agreement officially ended. Brother D excitedly said on social media that there was news that Worldcoin was updating its agreement with market makers, and this updated Worldcoin market maker agreement was one of the most favorable news he had ever seen.

What specific benefits did he analyze? First, according to the new market maker agreement, WLD's market makers can no longer make money by selling WLD risk-free as before, because they can no longer buy back the sold WLD from the foundation at a price of about $2 per coin. In other words, the price of WLD has the opportunity to rise for the first time without market maker suppression.

Secondly, the size of the market maker's loan was reduced from 75 million to 10 million WLD, and 65 million WLD were removed from circulation by the foundation. Due to these changes, Worldcoin's market value dropped to only $190 million, which is seriously underestimated considering its current AI narrative and association.

In short, WLD has become a typical high FDV/low circulation plate. And this time is still 2023, and the leeks have not seen such a battle. Seeing such a low market value AI concept coin, and also related to OpenAI's Sam Altman, how can they not be tempted?

On this day, WLD rose 54% in one day, from 2.4 to 4.6. But this rise was not sustained, and it soon fell back to 2.4 from 4.6. Many people who don’t know the inside story will mistakenly regard this rise as a news pull, because Worldcoin released the World ID 2.0 protocol update on December 13.

The third investigation: “Hidden” emissions sound the horn of short selling

On February 16, 2024, OpenAI released the Wensheng video model Sora. Compared with ChatGPT’s update from 3.5 to 4, this video model attracts more attention from people inside and outside the circle. Thanks to the OpenAI concept, WLD, LPT and ARKM started a crazy rise in February. WLD directly rose from $2 to a maximum of $12, an increase of nearly 5 times in one month.

Just when everyone was going crazy for WLD, Brother D sent a warning - WLD's extremely low circulation and Meme status are being broken. He pointed out that new "hidden" emissions have begun to increase exponentially. Starting from the last week of February, Worldcoin will distribute more than 10 million WLD directly to retail wallets (about 92 million US dollars at the time of the price), and will continue to distribute at a higher rate every two weeks.

At the same time, the Worldcoin Foundation has fully mastered the liquidity of the unlocked foundation treasury. Considering that the co-founder of Worldcoin said in August last year that the original intention of the market-making agreement was to "prevent the price from skyrocketing to something like $10," it is very likely that the foundation will conduct over-the-counter (OTC) transactions at the current overvalued price, thus forming a permanent top in an instant.

D reminded that based on previous bull market data, about 97% of the top 200 altcoins eventually fell by 90% or more. WLD, a meme coin with a higher valuation than OpenAI, will be no exception.

Although he said this was a generational short-selling opportunity, he also emphasized that such currencies often rise to prices beyond expectations, and most people may not have the patience, margin or willpower to withstand the pressure of shorting. Indeed, as he said, the madness of the market sometimes defeats everyone's reason. After he released the results of this survey, WLD continued to rise from $8 to $12.

Fourth investigation: Kill you while you are sick

On May 14, two and a half months had passed since he released his last investigation, and the price of WLD had fallen by more than 50% from its high point.

However, Brother D may not be satisfied with his short-selling results, and he has seized a new handle on Worldcoin to attack it.

On April 24, Worldcoin issued an announcement, announcing that it expects to sell WLD tokens from the Worldcoin Foundation subsidiary treasury in the next 6 months to meet the growing demand for Orb-verified World IDs around the world.

While Worldcoin emphasizes that it sells an average of 500,000 to 1.5 million WLD per week, which is less than 0.1% to 0.4% of the current weekly trading volume, Brother D calculated that Worldcoin will sell a total of $200 million worth of tokens to trading companies in these 6 months, which is equivalent to 18% of the existing circulating supply. This part of the funds clearly belongs to the part of the WLD token supply called "community", but it is sold to counterparties to benefit the foundation.

And more importantly, after 70 days, the VC and team tokens will begin to unlock, and the supply of WLD will increase by 4% every day. Based on the FDV of $60 billion, this is equivalent to nearly $50 million in continuous selling pressure every day. Brother D complained that WLD was designed with predatory token economics from the beginning, just to make the team and early investors rich. He also reminded that if you see any strategic announcements in the next few months, remember that this is just to ensure that insiders can get exit liquidity at a high valuation.

Fifth Investigation: Wolrdcoin Crusade

As D expected, when the early contributors’ tokens were unlocked on July 24, Worldcoin indeed issued a strategic pull announcement: the unlocking period of tokens allocated to the development company Tools for Humanity team members and investors will be extended from 3 years to 5 years. Everything is like a script written in advance.

And D also offered his most comprehensive WLD short report ever, which can be described as a culmination. In addition to reviewing how Worldcoin manipulated the price of WLD tokens through various means, he pointed out that Wolrdcoin will start internal unlocking at the lowest supply circulation in the industry history of 2.7%. This is the only thing that can keep WLD at $30 billion FDV, and all this is not for Universal Basic Income (UBI) as the team claims.

In fact, the token economics designed by the team will result in the majority of all issuance going to insiders rather than UBI beneficiaries next year. Brother D calculated that even with the latest unlocking schedule (unlocking volume dropped from 3.3 million to 2 million per day), nearly 1 billion tokens will flow to the team/VC in a year, while only 600 million tokens will be distributed to UBI beneficiaries by then based on the current UBI issuance rate forecast. This means that in one year, WLD issued by insiders is expected to account for more than 60% of the total circulation of Worldcoin.

In addition, there are multiple other sources that increase the circulating supply, including the previously mentioned tokens sold to trading companies at a discount and rewards received by Orb operators. These "rats" are taking away the rights that originally belonged to the UBI beneficiaries.

So the question is? Who are the leeks in the eyes of the dealers in this high FDV feast? Brother D said it was Koreans (he also dissed Koreans' poor English and inability to understand the actual situation). Nearly 25% of the circulating WLD is on Bithumb, and the holdings continue to grow.

Brother D finally concluded that Worldcoin's choice to release good news a week before the unlock was intentional in order to influence the market at a critical moment. Only if retail investors provide higher prices and more liquidity can insiders exit smoothly when unlocking. What is even more outrageous is that there are insiders who use inside information to buy in advance before the announcement is released.

The chart provided by Brother D shows that the price of WLD coincidentally soared 24 hours before the announcement was released.

Brother D said that all of the above are the reasons why he will short WLD in the next few months. I have loved you and hated you. Now let me send you back to zero with my own hands.

After sorting out the love-hate relationship between Brother D and WLD, we can find that there is nothing new under the sun, and high FDV will never be a meme. Speculating in coins without FDV is like talking about feelings without material things. Young people, you should be more realistic in your feelings, and the same goes for speculating in coins!

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