What is Worldcoin? Why the creator of ChatGPT needs a catalog of all the inhabitants of the planet
The Worldcoin cryptocurrency project from ChatGPT creator Sam Altman is close to launching its own token
Here's what you need to know about Sam Altman's blockchain project, who's backing it financially, and when it will have its own token
In addition to leading the development of ChatGPT and GPT-4, OpenAI CEO Sam Altman is also a co-founder of Tools for Humanity. It creates technologies for the blockchain project Worldcoin, whose tokens will be distributed among users in a rather unusual way.
According to the developers' plans, the future WLD token will be issued to those who will be identified by iris scanning. The company's proprietary device called Orb scans the eye and, based on that, creates a digital World ID for the user that can be used "in a wide range of everyday applications without revealing identity."
- Investment and expansion
About 2 million people are already waiting to receive their share of the Worldcoin token airdrop. The giveaway was planned back in the first quarter of this year but was later postponed. However, the project has big ambitions. "After the launch, we will begin to rapidly expand market by market, connecting more and more people," reads a presentation distributed to potential investors in the project late last year.
In May, the project reported raising $115 million in an investment round led by Blockchain Capital, a venture capital firm focused on the crypto market. For it, this is the second largest investment package, second only to its investment in Matter Labs, the developer of the zkSync solution.
Worldcoin as a project consists of several components. First is Tools for Humanity, co-founded in 2020 by Alex Blania, Max Novendstern, and Sam Altman. Acting as the lead developer of the Worldcoin project, the company has raised more than $240 million to date from venture capital funds including Andreessen Horowitz (a16z), Tiger Global, Khosla Ventures, and the venture capital arm of the Coinbase exchange.
Worldcoin is now valued at $3 billion at the end of its latest fundraising - the same amount it raised its first $100 million in March 2022. The project was previously funded by Khosla Ventures, crypto fund Andreessen Horowitz (a16z crypto) and Sam Bankman-Fried, founder of the bankrupt FTX exchange. After the new investment round closed, Blockchain Capital's Spencer Bogart joined the Tools for Humanity board of directors, and a16z crypto managing partner Chris Dixon joined as an observer.
Sam Altman is the co-founder of Worldcoin. His main contribution to the project is to create a strategy for how best to scale it. "Internally, we call it the Sam Altman effect," Blockchain Capital's Bogart wrote in a comment to The Block. "Focus on scaling. Everything else is irrelevant," he quoted Altman as saying.
- Structure and products
Worldcoin also has a non-profit foundation, the Worldcoin Foundation, registered in the Cayman Islands. According to its website, it is dedicated to "supporting the protocol and developing the Worldcoin community until the community becomes self-sufficient." The foundation is a step toward creating a decentralized autonomous organization (DAO) under Worldcoin. Worldcoin's website states that the foundation is designed to "enable prioritization of the protocol based on DAO decisions." The next steps, according to the description, include transferring intellectual property to the foundation and a grant program for developers.
As for the product, there's World ID, an identification protocol that people can use to prove their identity on the Web. There's also a proprietary software creation package, a World app that allows you to manage your confirmed ID and a range of cryptocurrencies, and, the Worldcoin token itself. All of these tools, with the exception of the token, appeared earlier this year.
Tools for Humanity is responsible for the app, and it is likely that in the future it will make money from transaction fees or exchanges ("swaps") within the wallet. According to the company, by May of this year, more than 500,000 people used the app at least once a month.
- Black market of accounts
Worldcoin's chosen method of token distribution is to ask people to confirm their identity by scanning their retinas with an Orb device. In March, Worldcoin struck a deal with manufacturer Jabil to ramp up production of its devices. According to The Block's sources, Worldcoin could produce up to 400 Orb per month.
A deconstructed Orb device. Source: worldcoin.org
Worldcoin has an operator program that rewards companies in stablecoins for performing eye scans on volunteers. About 2 million people have joined the program so far, mostly in Latin America, Africa, Southeast Asia, and Europe. Kenya, for example, had about 250,000 people registered by December last year, with only 45 devices among operators in the country.
However, Worldcoin has faced a black market of verified accounts. In May, there were reports that in China, where it is still impossible to register in Worldcoin, people were buying iris scans made in Cambodia and Africa for as little as $30. Presumably, the buyers expected to get an airdrop of tokens that could pay back their investment many times over when going public on cryptocurrency exchanges.
The company then took a number of steps to try to fix the problem, including "adjusting the initial in-person registration process" and introducing dynamic and static QR codes.
- Token and airdrop
The token launch is a watershed moment for the project. Airdrop has already been postponed multiple times. A Worldcoin representative told The Block that the exact launch date will be chosen by the Worldcoin Foundation. According to his other source to the publication, the launch is expected soon, possibly as early as the third quarter of this year.
In exchange for eyeball scans, registered users will receive Worldcoin tokens. Investor documents published last December suggest that users will be able to request ("brand") tokens each week, with the total number of tokens decreasing over time.
The same document reveals more details about the future tokenization of the project. The total number of WLD tokens will be 10 billion, of which 80% will be for users, operators, and the ecosystem, and 20% for the Worldcoin team and investors. The tokens of team members and investors will be unlocked gradually over three years. The developers also intend to make WLD a governance token, i.e. give holders the ability to vote on proposals in the DAO. WLD tokens will not be available in the US and other countries.
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