Worldcoin (WLD) Jumps 60% in a Week as Token Lock-Up Period Extended to Five Years

Worldcoin (WLD) saw a significant price increase of over 36% on Tuesday after the Worldcoin Foundation announced an extension of the lock-up period for WLD tokens from three to five years. This decision addresses investor concerns regarding the substantial supply of WLD tokens entering circulation over the past few months.

Worldcoin Extends Token Unlock Schedule

In a recent blog post, decentralized identity protocol Worldcoin revealed that the lock-up period for early contributors and investors, initially set at three years, has been extended to five years. Tools For Humanity (TFH), the software company instrumental in the development of the Worldcoin project, transferred ownership to the Worldcoin Foundation but continues to develop and operate the World App. TFH team members were allocated locked WLD tokens as recognition for their contributions.

Previously, the three-year unlock schedule allowed approximately 3.3 million tokens to enter circulation daily. With the new five-year schedule, only 2 million tokens will be unlocked daily, significantly reducing the daily supply influx.

Impacts of the Lock-Up Extension

Worldcoin is experiencing its highest token unlock value this month, with around 53% of its supply, valued at over $600 million, being released into circulation according to Token Unlocks data. The abrupt change in the unlock schedule has prompted mixed reactions from early investors. Some have expressed concerns about the impact on their investment strategies, while others view it as a potential manipulation tactic to boost the token’s price.

Market Reaction and Investor Sentiment

Following the announcement, WLD's price surged by over 36% in the past 24 hours, with bullish sentiment prevailing in the broader market. The reduction in daily unlocks is seen as a positive development, potentially limiting the downside pressure on prices and renewing investor confidence.

However, investors are advised to exercise caution, as periods of heightened confidence can often lead to price corrections. With over 99% of WLD tokens currently in profit, there is a possibility that some investors might sell off their tokens to secure profits.

Overall, the extension of the lock-up period has been a significant move by the Worldcoin Foundation, aiming to stabilize the token's market dynamics and address investor concerns, while also creating a positive impact on the token's price trajectory.