Looking back at eyeball-scanner Worldcoin's tumultuous year

Highly anticipated cryptocurrency project Worldcoin WLD -6.27% faced significant controversy and scrutiny during 2023.

The project was criticized both for its business model that involves scanning people's irises in exchange for cryptocurrency, and for allegedly targeting people living in developing economies.

Yet one of the project's figureheads, Sam Altman — co-founder of Tools of Humanity, the lead software contributor behind Worldcoin — is no stranger to controversy. The tech entrepreneur was fired as CEO of OpenAI only to be rehired within days after a huge backlash, with support from his legion of followers and Tools of Humanity itself.

With this backdrop, Worldcoin's unique journey as a billion-dollar startup with grand ambitions may have only just begun. The project will likely continue to navigate a contentious regulatory landscape riddled with data privacy concerns while simultaneously attempting to balance the challenges of growth and innovation.

Here is recap of how the project fared at different points throughout 2023:

Unicorn startup starts behind schedule

Heading into the year, Worldcoin, which had yet to fully launch, had already garnered tons of interest. Since late 2021, when Worldcoin unveiled its Orb technology — and quickly achieved a $1 billion valuation thanks to a $25 million fundraise involving heavyweight VC backers like Andreessen Horowitz (a16z), Coinbase Ventures and Digital Currency Group — the eyeball-scanning startup has been a topic of discussion among data privacy advocates. 

In March of 2022, Worldcoin raised another $100 million from investors including Khosla Ventures and a16z at a valuation of $3 billion. Parallel to its success raising capital at a multi-billion dollar valuation, the immense attention being paid to Altman’s OpenAI, the parent company of ChatGPT, simultaneously augmented interest in Worldcoin.

Although at one point Worldcoin had hoped to have 20 million to 30 million sign-ups by the end of 2022, the project only unveiled its World ID protocol and software development kit in March 2023. The World ID app is a mobile tool designed to allow people to prove they're an actual human without revealing their identity. 

Worldcoin's ability to make good on its expectations of quickly signing up tens of millions of new users has been hampered by issues related to the manufacturing of its iris-scanning orbs. In March, Worldcoin forged a partnership with Florida-based global manufacturing giant Jabil in the hopes of resolving issues related to orb production. 

Launching the wallet

In May, Worldcoin launched its self-custodial mobile app in over 80 countries after a beta testing phase in which the company accumulated 1.5 million users while logging 60,000 transactions on a typical day. “It’s already the fastest growing wallet in the world. Today every 14 seconds a person signs up to app,” said Tiago Sada, head of product, engineering and design at Tools For Humanity, at the time.

Worldcoin has been forced to address technical issues related to its blockchain. In July, Worldcoin completed its migration to the OP Mainnet. But later in the year a project executive said: “We broke the chain at launch. We had way too many users.” In an effort to address the on-chain concerns, the project would later unveil a new grants program for developers.

Token launches and scrutiny ensues

The inflection point of Worldcoin's year may have occurred in July, after the project launched its WLD token. At the time, more than two million people — mostly individuals from underdeveloped nations located in the Global South — were already in line to receive tokens. People who had been verified by a Worldcoin orb were set to initially receive 25 WLD tokens.

At launch, WLD’s price rose above $3 before it would fall to a low of just above $1 in September, according to The Block's Price Page . The token's price would then rebound by the end of September and continue to trade above $1.80 for several weeks. WLD's resurgence would parallel a broad increase in the price of cryptocurrencies.

Facing regulatory scrutiny

Almost immediately after the July launch of Worldcoin's token, the UK’s data protection regulator said it would look into the project. About a week later, a German regulator followed suit by saying it would examine whether Worldcoin users have “sufficient and clear” information about how the project uses their sensitive biometric data. French regulators also said they would conduct a probe.

While Argentina launched an inquiry of its own in August, perhaps the project's biggest regulatory set back happened when Kenya’s Ministry of the Interior suspended Worldcoin from operating there until relevant agencies in the country could assess what risks the project poses to the population. At the time, Worldcoin had already signed up hundreds of thousands of people in Kenya.

Slowed growth after fast start

When discussing the project publicly, it appears Worldcoin leadership — aware they are far behind their original predictions of adoption — are taking a slightly more modest approach when discussing expectations. In September, Altman admitted Worldcoin faces huge operational challenges which includes both the manufacturing of orbs and confronting government resistance to biometric data collection.

“We had a really crazy, crazy surge in the weeks after launch,” Worldcoin co-founder Alex Blania said. "The craziest thing for us was that there were long, long lines of people waiting to set up pretty much everywhere. And that was really hard to manage."

While Worldcoin has said that more than 1% of the population of countries like Chile and Portugal have signed up for the project, overall new sign-up numbers appear to have slowed during the final months of the year.

At the time of writing Worldcoin had about 2.5 million total sign-ups. More than 43 million WLD tokens had also been claimed, according to the company's website.

Selling tokens

In early December, The Block reported that Tools for Humanity was in talks with investors about raising more capital through the sale of WLD tokens.

Two people familiar with the talks said said Tools for Humanity wanted to raise up to $50 million, with WLD potentially priced at $1 per token. This would be a significant price discount when compared to the the prevailing spot price of $2.50 . However, another person close to the deal stressed that no terms had been finalized.