Author: GaryMa, WuBlockchain

With attention-grabbing terms like “OpenAI founder,” “luxurious financing background,” and “universal airdrop,” Worldcoin has garnered significant attention. Worldcoin, founded by OpenAI founder Sam Altman, recently announced the completion of a $115 million Series C funding round led by Blockchain Capital, with participation from a16z, Bain Capital Crypto, and Distributed Global. In October 2021, Tools for Humanity, the development company behind Worldcoin, raised $25 million at a valuation of $1 billion, with participation from notable investment firms such as a16z, Coinbase, Multicoin Capital, and 1confirmation.

The power of the Internet lies in its strong network effects, and with the advancement of cryptocurrencies and the Web3 industry, users now have the ability to have control and ownership over networks.

However, no cryptocurrency network has achieved mass adoption yet. If a cryptocurrency network or a specific cryptocurrency were adopted by the majority or even globally, it would unleash significant network effects, potentially giving rise to applications that were previously unimaginable.

This is the vision of Worldcoin: a globally adopted cryptocurrency economic network.

From a functional perspective, Worldcoin can be divided into three main modules:

1. World ID: A decentralized identity protocol that protects privacy and proves the uniqueness and authenticity of users without revealing their personal data such as names and email addresses.

2. Worldcoin (WLD): Tokens distributed freely to people, serving as utility and governance assets.

3. World App: A fully self-custodial official wallet that enables payment, purchases and transfers globally using the Worldcoin token, digital assets and traditional currencies.

In practice, these three modules are not independent but integrated. They are presented separately here for conceptual clarity.

So, how can Worldcoin quickly establish network effects? Worldcoin’s approach is to distribute tokens to all real users. Everyone can receive a certain amount of Worldcoin Tokens for free. The challenge here is to solve the “human-bot verification” problem without compromising user privacy. For this purpose, Worldcoin has developed a biometric device called Orb, which scans users’ irises and converts the iris photos into iris codes. This helps users register without the need to store or upload their iris photos, ensuring only the generated iris codes are saved.

The workflow in practice is as follows:

Phase 1: Sign-up and uniqueness check（World ID Sign-up）

● The user generates a Semaphore keypair on her phone.

● The user presents the hashed public key (via QR code) to the Orb.

● The Orb scans the user’s irises and locally computes the user’s IrisHash.

● The Orb sends a signed message containing the hashed public key and the IrisHash to the sign-up sequencer node.

● The sequencer node verifies the Orb’s signature, then checks if the IrisHash does not match any already in the database. If the uniqueness check passes, the IrisHash and the public key are saved.

Phase 2: Claiming Worldcoin

● The user’s app locally generates a wallet address.

● The app uses Semaphore to prove that it owns the private counterpart to one public key registered in Phase 1. Because it’s a zero-knowledge proof, it does not reveal which public key.

● The proof is sent again to the sequencer, which verifies it and initiates the deposit of tokens to the provided wallet address.

● A so-called nullifier is sent along with the proof and ensures the user cannot claim the reward twice.

It is worth mentioning that through the use of Zero-Knowledge Proofs (ZKPs), Worldcoin accounts can be dissociated from Orb’s related data. When users use their World ID, ZKP prevents third parties from knowing their wallet public key or tracking them across applications. ZKP also ensures that the usage of World ID is not tied to any biometric data or personal iris codes.

World ID

World ID is currently the core protocol of the Worldcoin ecosystem. As a decentralized identity protocol that protects privacy and does not collect or store users’ biometric information, it can play a crucial role in solving the human-bot verification problem in the upcoming AI era. However, the human-bot verification problem is just one of the basic use cases of World ID. Considering its anti-sybil defense features, World ID can have applications in governance, identity verification, reputation systems, and more.

Worldcoin Token（WLD）

Worldcoin Token (WLD) currently has limited information available. It has a total supply of 10 billion tokens, allocated as follows:

● 8 billion tokens for community distribution

● 1 billion tokens for long-term funding of the Worldcoin protocol, including developer grants

● 1 billion tokens for contributors to the protocol, including investors

Worldcoin Network：OP Rollup L2 & SuperChain

The positioning of the Worldcoin network is not to create a separate network but to build an optimistic rollup L2 network based on the Ethereum mainnet to leverage the composability of the Ethereum network. On May 11th, Worldcoin officially announced its vision for the OP Superchain.

Issues and Challenges:

Some users may have a limited understanding of Worldcoin and perceive it only as an application where they can receive airdropped tokens for free. Let’s loosely consider Worldcoin as an OP superchain with built-in wallet and identity protocols.

Currently, the iris recognition technology and the associated workflow behind Orb are unfamiliar to most people. This innovation brings both potential and skepticism, as it faces the following challenges:

● Feasibility of offline user adoption for Orb iris recognition on a large scale: regulatory considerations in different regions and personal resistance to this type of biometric scanning. Currently, Worldcoin has registered nearly 1.8 million users, mainly concentrated in countries such as Argentina, India, and Spain.

● Long-term viability of iris code technology: We can set aside hypothetical questions about vulnerabilities in Orb hardware, ZKP verification, and other aspects. Looking ahead, a potential concern is whether the iris codes generated from scanning will remain consistent as a person’s age changes.

● Management of iris codes: Based on the available information, iris code data is uploaded to the sequencer node, which are currently likely to be operated by the official team. Since ZKP technology is used, the iris data (or World ID) is not associated with users’ wallet addresses. Even if the iris data were to be leaked or stolen, it would not involve users’ privacy. However, this assumption relies on trust in the storage practices of the official team and the application of ZKP technology.

In closing

The cryptocurrency industry has long advocated for “driving mass adoption.” Regardless, it is a positive development for the cryptocurrency industry that Worldcoin is attempting to break barriers with such a vision. At the very least, it has a strong support team, a luxurious institutional lineup, and offers free tokens.

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