WorldCoin & Steps in the DApp Evolution

Jehn외 2명
Senior Analyst/Team Lead/
Nov 15, 2023

Table of Contents

1. 2023 Crypto Market is Without Clear Keywords

2. WorldCoin and New Ventures in a New Era

3. WorldCoin: The Next Step for SBT?

3-1. Identification via iris scans and fair distribution of basic income

3-2. Token Distribution for User Attraction

3-3 Mass Adoption Still a Challenge Amidst Controversies

4. Attention to Amid Anticipation of Airdrop

4-1. Decentralized Social Platform Monetizing Social Media Influence

4-2. Price Surge of In-App Asset 'Keys' Without Substantiated Value

4-3. Controversies Surrounding

5. Not yet a Game changer, but meningful challenge




1. 2023 Crypto Market is Without Clear Keywords

In 2020 and 2021, the crypto market experienced unprecedented growth driven by major keywords like DeFi, NFTs, and Play-to-Earn (P2E). However, from 2022, the market faced setbacks such as the Terra-Luna debacle and FTX's demise, on top of an unfavorable macroeconomic environment. And the result is the ongoing crypto winter. The market cap has dropped 65% from its 2021 peak, and interest is also waning rapidly.

Despite this bearish market, there are some noteworthy keywords:

  • Layer 2 solutions to address Ethereum's scalability issues
  • Blockchain gaming growing in South Korea, Japan, and Southeast Asia
  • Traditional Web2 companies expanding into the Web3 industry
  • SoulBound Tokens (SBT) for identity, authorization, and qualification verification

Nevertheless, it's challenging to envision the keywords listed above to immediately alter the current state of the cryptocurrency market. Layer 2, an infrastructure solution similar to the internet of the Web2 era, isn’t an answer to attract actual users. Blockchain gaming remains in the very early stages of development in most countries except for Korea. And while several countries are preparing regulations regard virtual assets, most Web2 companies are only ankle-deep into the underdeveloped Web3 waters.

In contrast, Ethereum's Vitalik Buterin introduced the concept of SoulBound Tokens (SBT) in May 2022, when the crypto world was rumbling after the Terra-Luna incident. SBT brought new possibilities and hope to the market, signifying non-transferable tokens with attributes such as identity, authorization, and qualification verifications. And with it, Buterin proposed a new vision of an ideal decentralized society based on blockchain. And this year, services inspired by the concept of SBT have been making strides.


2. WorldCoin and New Ventures in a New Era

Two of the most notable services in the 2023 cryptocurrency market are WorldCoin and While they may not lead the overall market's bull run, they have injected vitality into the market since their respective launches.

In this article, we will explore two innovative projects based on the unique characteristics of blockchain, such as trustlessness, permissionlessness, and data finality. In doing so, we discuss WorldCoin, which aims to prove personhood in the AI era through iris scans, as well as, which seeks to monetize intangible values, such as influence on Twitter in the era of social media. Then we will also assess whether these two projects could be instrumental in the mass adoption of blockchain as an extension of the SBT concept.


3. WorldCoin: The Next Step for SBT?

3-1. Identification via iris scans and fair distribution of basic income

WorldCoin is a project that was launched in July by Sam Altman, the CEO of OpenAI, the developer of Chat GPT. WorldCoin aims to distinguish humans and artificial intelligence (AI) using iris recognition in preparation for the AI era and to build a global economic community. WorldCoin users register their iris data using the Orb, an iris recognition device, and receive their proof of digital identity called World ID as well as WorldCoin ($WLD) in return. And $WLD will be utilized as a means to provide universal basic income in the coming age of AI. The components of WorldCoin are as follows:

  • World ID: Issued by the WorldCoin protocol when users register their iris data using the Orb, World ID is a digital identification. Users can protect their personal information using World ID, which uses zero-knowledge proof, enabling them to prove their personhood online while keeping their privacy.
  • World App: World App is the first application of World ID. It stores users' World ID while implementing an encryption protocol that protects personal data while securely sharing it with third parties. The goal of WorldCoin is to integrate World ID with various digital wallets to enable users to easily access to the global DeFi infrastructure.

Source: WorldCoin, Xangle

WorldCoin implements a Proof of Personhood (PoP) identity verification protocol to prevent user duplication. PoP is a proof mechanism that can resist against malicious attacks with fake IDs on a peer-to-peer network. Here is how WorldCoin operates the PoP mechanism:

  • User: An individual who needs to prove their qualifications to access specific resources or execute certain tasks.
  • Credential: A data set containing evidence used by users to prove their personhood.
  • Issuer: A trusted institution that verifies the user's information and
  • Verifier: Reviews the user's PoP identity proof and verifies the authentication process. Once verified, the user is granted permission to perform specific tasks.

3-2. Token Distribution for User Attraction

WorldCoin has a maximum supply of 10 billion $WLD, with an initial inflation rate of 0%. At the time of the WorldCoin launch, the circulating supply of $WLD accounted for about 1.43% of the total supply, which was set conservatively to ensure the distribution could provide users with a universal basic income of $2 per week when the AI era arrives. However, an annual inflation of around 1.5% may occur as early as 15 years from now, subject to future protocol governance.

The initial distribution included allocations of 43 million $WLD and 100 million $WLD each for Orb-verified users and market makers (MM) operating outside the United States. Additionally, during the launch week, new verifiers and existing Orb verifiers were given 25 $WLD, but only new verifiers or Orb operators will receive rewards in the future.

WorldCoin's token distribution plan is as follows:

  • 75% goes to the WorldCoin community, with the remaining 25% distributed to WorldCoin's parent company, TFH (Tools for Humanity) investors (13.5%), the initial development team (9.8%), and THF Reserve (1.7%).
  • The allocation to the WorldCoin community is divided among User Grants (80%), Network Operations (13%) and Ecosystem Funds (7%). These figures are subject to change as they aim to secure a flexible supply for user attraction in the future.

3-3. Mass Adoption Still a Challenge Amidst Controversies

The World App wallet accumulated approximately 1.2 million registered users, but recent trends have shown a significant decline in new registrations. Particularly since the airdrop event in July, new registrations have plummeted by about 96%, with an average of only 70 new users per week from October. This indicates that the initial surge was likely a result of high expectations due to the airdrop, and the actual number of active users may be lower than anticipated.

WorldCoin must overcome the following challenges to become a genuine identity verification tool:

  • Lack of Revenue Model: Despite successfully raising three rounds of major funds that amount to over $235 million, WorldCoin is far from having the funds required to achieve its goal of providing a universal basic income of $2 per week to all of humanity. The project lacks a clear plan for how it will generate revenue and maintain the value of its token. Sam Altman also failed to provide a clear answer to concerns about means to source funds during a startup meeting in June.

  • Ethical Concerns: For building its initial database, WorldCoin primarily collected biometric data from low-income individuals in developing countries without sufficient explanation. Some early WorldCoin participants criticized the project for collecting personal information without proper consent, labeling it as "data exploitation using virtual assets as bait" in some cases. The more critical issue is that iris data, being highly sensitive personal information, cannot be completely deleted after collection. Furthermore, while WorldCoin claims to encrypt the user iris data for storage, it remains uncertain whether the team has undergone rigorous verification of these procedures.

  • Regulatory Challenges in Various Countries: WorldCoin deals with sensitive personal information, such as iris data, making it susceptible to regulatory scrutiny. Some governments are already supervising and investigating the safety and security of WorldCoin. The Kenyan Data Protection Commissioner pointed out that Tools for Humanity, the parent company of WorldCoin, had not clarified its true intentions regarding data collection and conducted a search of the WorldCoin Nairobi office. The Kenyan Ministry of Interior and National Administration suspended WorldCoin’s activities until it becomes clear that its project doesn't pose a risk to Kenyan citizens. Also, the United Kingdom, France, Germany, and other countries have begun investigations due to concerns about personal data protection, regulating business operations in their respective nations.

  • Securities Issues: In a recent lawsuit with the SEC, Ripple received a ruling that states "from an institutional buyer's perspective, it's plausible that any reasonable investor would have viewed Ripple Labs’ efforts as aimed at profiting via." Sam Altman, the co-founder of WorldCoin and CEO of OpenAI, has a history of generating substantial profits through investments in projects like ChatGPT and several startups. Therefore, there is a possibility that, in a legal context, WorldCoin investors may be viewed as having purchased WorldCoin ($WLD) with expectations of profiting from Sam Altman and his team's efforts. If the SEC raises issues with this, WorldCoin could potentially face legal disputes, including delisting or discontinuation of its business.

4. Attention to Amid Anticipation of Airdrop

4-1. Decentralized Social Platform Monetizing Social Media Influence is a decentralized social platform built on Base, the Layer 2 chain of Coinbase, the largest crypto exchange in the United States. also enables users to monetize their Twitter accounts by integrating with X (formerly Twitter). Influencers on the social media platform can sell the stake(Keys) in their Twitter accounts, and users can purchase these Keys to engage with influencers or form communities with Key holders., yet to be officially launched, adopts an airdrop strategy, distributing points to users every Friday instead of issuing tokens. The quantity of airdropped points is proportionate to the price of the purchased Keys and the number of chat interactions. According to, points will be distributed over a six-month period from August 2023 to February 2024.

The process of using involves the following:

  • To join, a user needs an invitation code, commonly shared on platforms like Twitter and Telegram. Also, registered accounts can issue three invitation codes to be shared.
  • After inputting the invitation code, the user deposits 0.01 ETH.
  • Users that deposited 0.01 ETH can then purchase Keys to access community chat rooms. As of October 27th, the highest-priced Twitter account, @CBB0FE, holds 178 holders, and the price of a Key is 5.329 ETH.

4-2. Price Surge of In-App Asset 'Keys' Without Substantiated Value

As mentioned earlier, Keys are assets used to trade monetized Twitter accounts on The total issuance of Keys is not fixed, and their value is determined by a bonding curve influenced by demand within a specific group. The bonding curve, unlike traditional order book trading, automatically determines the token price through smart contracts, which enables trading even without specific buyers and sellers.

 * To read more about order book trading: “A Guide for Cryptocurrency Enthusiasts on Navigating the Web3 Universe 2. Decentralized Exchange

The price of Keys is determined by the pricing model expressed by the formula n^2/16000 (n=total issuance, 16000=constant). And the selling price is determined by the formula (n-1)^2/16000, creating a structure where prices rise as the number of buyers increases (refer to @macrocephalopod). For instance, when there are 120 Key holders, the purchase price exceeds 2 ETH. This model makes price fluctuations rapid based on demand, thus token utility that justifies the price is crucial. However, as Keys do not grant rights to generate or distribute profits, some researchers criticize this structure as a form of "ponzi."

Nevertheless, the increasing number of Key buyers can be attributed to the following:

  • Implementation of bots automate Key purchases
  • Anticipation for airdrops attract many to buy Keys
  • Participation of trading influencers like RookieXBT and NBA star Grayson Allen, attracting attention to

4-3. Controversies Surrounding

Since its launch, has recorded notable metrics:

  • Maximum daily buyer counts of 32,827.
  • Accumulated transaction count of 6.5 million over approximately a month after launch.
  • Surpassed 200,000 unique buyers.

However, these statistics are considered temporary from the news of prominent VC firm Paradigm investing in Paradigm, known for past investments in projects like Uniswap and Blur, raised significant profit via token airdrops. Therefore, the market expects to conduct an airdrop to recover Paradigm’s investment.

Soon after the news of Paradigm's investment, has shown signs of a decline. The number of Key sellers and buyers has significantly decreased and finding practical use cases of's main features within the community has become challenging. Currently, the primary motivations for users to use seems to be the anticipation of airdrops. Thus, the project needs to overcome the following challenges to for sustainability viability post-airdrops:

  • Founder's Risk:'s founder has a history of abruptly discontinuing or pivoting projects. The parent project of is Stealcam, a decentralized social media platform developed by the Arbitrum team. Stealcam, known for allowing free NFTization of photos, gained popularity of achieving 1,000 new users daily. But it pivoted to, ultimately making the former a ghost project. Additionally, one of's founders, Racer, had previously operated the NFT project TweetDAO, which was abruptly discontinued before Stealcam. These projects had pyramid-like economic structures similar to ponzi schemes and demonstrated a pattern of sudden cessation within a short timeframe.

  • Uncertain Token Value: According to digital asset research firm ASXN, assuming 1) earns approximately $200M in fees over six months, 2) users receive airdropped points equivalent to 30% of FDV, and 3) the maximum issuance of points is 100 million, the token's calculated price per token is around $0.6. However, this assumption relies on the revenue being equivalent to the market capitalization and it is hard to estimate the ratio of airdropped points and the swap ratio between points and tokens. Considering that revenue for the first two months after launch amounted to only about $25M, the actual token value is expected to fall below $0.6. A the number of users continues to increase, the quantity of airdrop points per person is also likely to decrease.

Source: X (formerly Twitter)

  • Unstable Business Model:'s current revenue depends on the fees generated from Key transactions. Although it has accumulated a total fee revenue of $25M so far, this figure is inflated due to the temporary excitement around the anticipation for token airdrop. If interest in diminishes, and Key transaction volume decreases, revenue will decline. The project's revenue is highly sensitive to Key transaction volume, making it unstable in the long-term. And this raises doubts about the project's long-term stability.


5. Not yet a Game changer, but meningful challenge

Limits of WorldCoin and

The fundamental limitations of WorldCoin and lie in their lack of a solidified business model as well as a high dependence on new user acquisition and liquidity. This result in significantly reduced visibility into the project's sustainability. Additionally, there is a risk that blockchain-issued crypto assets could be exploited as instruments for speculation and ponzi schemes.

Nevertheless, the two projects are meaningful because…

The two projects are searching for solutions to the issues of the new era using the unique characteristics of blockchain technology. WorldCoin is a project born out of the concern to prove human identity in an era where the boundary between humans and AI becomes blurred. Sam Altman, the CEO, stated at the WorldCoin Seoul Meetup last June, "In the age of AGI (Artificial General Intelligence), our society must distinguish between real people and AI and address the issue of distributing the benefits provided by artificial intelligence." Considering the project surpassed 100 million monthly active users within two months of launch and continues to expand its utility, especially in the context of the ChatGPT, such preparation for the era of AI isn’t not a discussion to take lightly. also proposes a method to monetize and liquidize intangible values amidst the growing influence of social media. By measuring the value of influencers and allowing them to be traded in the market, provides new investment opportunities and business potentials.

Furthermore, the development of blockchain infrastructure has led to the expansion of application functionalities and improvement in UX/UI. Both WorldCoin and Friend.Tech operate on Arbitrum and OP Stack, respectively, allowing users to access various services without gas fees thanks to the emergence of Layer 2. In terms of UX/UI, WorldCoin is integrated with a hardware device Orb that recognizes irises. And simplifies the crypto asset wallet experience, distributed in a form similar to a mobile app.

Although it has limitations, it's definitely an evolutionary step for the problem that Worldcoin and are trying to solve.

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