100 Wallets Control 90% of Circulating WLD, Grayscale ETF Filing Reveals

Ownership Concentration in Worldcoin Revealed

Grayscale’s recent filing for a proposed Worldcoin ETF has disclosed that the top 100 wallets currently control approximately 90% of the circulating WLD supply. This finding raises significant concerns regarding ownership concentration and the governance structure underlying the project.

Details of the ETF Filing

The filing, which is part of Grayscale’s efforts to obtain SEC approval for its Worldcoin ETF, states that governance of the token remains largely in the hands of the World Foundation. It highlights reliance on centralized infrastructure, despite the project’s prior vision for decentralization.

As per the filing, Grayscale plans to launch this ETF under the ticker symbol GWLD, providing investors direct access to Worldcoin through regular brokerage accounts, thereby eliminating the need for them to buy and manage the token independently. If approved, the ETF would directly hold WLD, with BitGo Bank & Trust serving as custodian.

Token Distribution and Governance Risks

In its prospectus, Grayscale identifies that the significant concentration of WLD ownership could pose risks to investors. The filing acknowledges that many of the early holders of the token possess a substantial portion of the circulating supply, which is counter to Worldcoin’s original intent to distribute tokens among verified individuals.

Furthermore, governance decisions remain primarily under the World Foundation’s control, which deviates from earlier commitments to implement a more decentralized governance system. The current structure appears to lag behind Worldcoin’s stated goals of community-based decision-making.

Concentration in Blockchain Infrastructure

The registration statement also covers operational risks inherent to the blockchain. Currently, World Chain operates with a centralized sequencer, and critical upgrade functions are managed by a limited group affiliated with the project. Additionally, the Orb devices for user verification are mainly developed under the direction of Tools for Humanity, a key stakeholder.

Potential Impact of ETF Approval

While Grayscale’s application seeks to establish a regulated avenue for investing in WLD, it is important to note that SEC approval is not guaranteed. The proposed ETF comes amidst growing interest in Worldcoin, particularly following its recent listing on Robinhood, which increased retail access to the token. However, despite the listing, WLD experienced a nearly 15% decline on that trading day due to ongoing scrutiny related to its biometric identity verification processes and distribution model.