Worldcoin, a blockchain project from ChatGPT-maker OpenAI, has gained significant traction since its launch in July 2023. Now ranked among the top 100 digital assets by market capitalization, the project’s native token, WLD, is facing potential devaluation due to a small portion of its total supply being in circulation.

Data from IntoTheBlock suggests an increased risk of dilution in WLD’s market cap over time, with future token unlocks potentially leading to significant losses for holders.

To break down the effect of lower circulation on prices, IntoTheBlock gave the example of a hypothetical cryptocurrency “A” priced at $1 with only 10% of its total supply in circulation. Since market cap is calculated using circulating supply, IntoTheBlock explained that if “the remaining 90% of the tokens enter circulation, the overall value must increase significantly to maintain the $1 price per token,” adding:

“In essence, as more tokens enter circulation, the value of each token can get diluted unless there is a corresponding increase in overall demand.”

As per the data from CoinMarketCap, the current circulating supply of WLD is 283 million, while the total supply is a staggering 10 billion. At the time of publication, WLD was trading at $2.47, down 4.5% in the last 24 hours but up 29.78% over the past seven days.Blockchain detective ZachXBT recently criticized Worldcoin on X (formerly Twitter), calling it the “biggest scam of the bull run” amidst upcoming insider unlocking events. Crypto Banter host Ran Neuner also cautioned investors against investing in WLD.