Worldcoin (WLD) tokenomics

Worldcoin (WLD) is designed as a utility token with governance properties, centered around a "proof of personhood" model. The economic structure is intended to incentivize the growth of a global identity and financial network.

Issuance Mechanism

Worldcoin was launched as an ERC-20 token on the Ethereum mainnet, with a significant portion of its activity occurring on the Optimism Layer 2 network.

• Total Supply: The total supply is fixed at 10 billion WLD for the first 15 years following launch.
• Inflation: After the initial 15-year period, the protocol's governance has the authority to implement an inflation rate of up to 1.5% per year if deemed necessary for the long-term sustainability of the network.
• Cross-Chain Presence: While the majority of the supply exists on Ethereum, a portion is bridged to Optimism to facilitate low-cost distributions and transactions. As of March 2024, approximately 164.04 million WLD had been bridged to the Optimism network.

Allocation Mechanism

The 10 billion WLD tokens are distributed across three primary stakeholder groups: the community, the initial development team, and investors.

Within the Community Reserve (75% of total supply), the funds are further subdivided:

• User Grants: At least 6.00 billion WLD (60% of total supply) is earmarked for distribution to verified individuals.
• Operational Costs: Approximately 1.00 billion WLD (10% of total supply) is set aside for operational expenses, including rewards for Orb Operators.
• Ecosystem Fund: Approximately 500 million WLD (5% of total supply) is dedicated to R&D, audits, and ecosystem grants.

Usage and Incentive Mechanism

The WLD token serves several core functions within the ecosystem to align the interests of users, operators, and developers.

• User Incentives (Grants): Individuals who successfully verify their "personhood" via an Orb device are eligible for WLD grants. This typically includes a "welcome grant" (1.0 WLD) and recurring grants (e.g., 25.0 WLD) to encourage long-term participation.
• Orb Operator Rewards: Independent local businesses that operate Orb hardware are rewarded in WLD for every successful user verification they perform. This incentivizes the physical expansion of the network.
• Governance: Tokenholders will eventually have the power to govern the protocol, including the ability to configure user grants and influence the use of the Community Reserve.
• Network Utility: Future uses may include using WLD for payments within the World App or other compatible wallets, as well as signaling support for specific initiatives.

Locking and Unlocking Mechanism

To ensure long-term alignment and prevent immediate market saturation, tokens allocated to insiders and investors are subject to strict vesting schedules.

Locking Mechanism

• TFH Team and Investors: These allocations are subject to a 12-month lock-up period following the project launch (or the exercise of warrants).
• Community Reserve: While a portion is available for immediate grants and operations, large segments are held in "Community Token Unlock Contracts" to be released over time.

Unlocking Time and Schedule

Once the initial 12-month lock-up expires, the tokens for the team and investors follow a linear daily unlock schedule:

• Duration: The unlocking occurs daily over a period of 24 months.
• Governance Control: The Worldcoin Foundation manages the release of community tokens, and governance can adjust the rate of user grant distributions, potentially phasing them out or decreasing them over time.