Grayscale has taken a significant step by submitting a registration statement to the US Securities and Exchange Commission for an exchange-traded fund (ETF) aimed to hold Worldcoin’s WLD token directly. This proposed ETF, if approved, is intended to list on Nasdaq with the ticker symbol GWLD.
The ETF will aim to mirror the value of WLD tokens held within the trust, utilizing the CoinDesk Worldcoin Benchmark Rate, minus any applicable fees and expenses. At present, Grayscale has not yet specified crucial details like the fund’s management fee, initial seed investment, or the specific amount of WLD each share will represent. These important components are expected to be detailed in forthcoming amendments to the fund prospectus.
Shares of this fund will be processed in increments of 10,000, known as baskets. Authorized participants will be able to create or redeem these baskets either by exchanging WLD directly or by submitting cash orders, a process facilitated by liquidity providers. Key players in the custody and administration of the fund include BitGo Bank & Trust, which will hold the WLD assets, while The Bank of New York Mellon assumes administrative duties. The CSC Delaware Trust Company is set to act as trustee.
This trust is designed to function as a passive investment vehicle, as it will neither leverage nor employ derivatives. Its primary purpose is to offer investors exposure to WLD without necessitating the direct purchase or custody of the token itself.
WLD serves as the native token of World Network, a digital identity initiative originally developed by Tools for Humanity, co-founded by notable figures Sam Altman and Alex Blania. This initiative merges several components, including World ID, a proof of personhood system, alongside World Chain, World App, and biometric verification tools known as Orbs.
According to Grayscale's filing, there were roughly 3.5 billion WLD tokens in circulation as of June 30, with a total market capitalization nearing $1.4 billion and daily trading volumes around $135.1 million. At that time, WLD was the forty-first largest cryptocurrency based on market capitalization.
However, Grayscale did note potential risks associated with the product, particularly its reliance on biometric data. The use of iris recognition via Orb devices has prompted regulatory scrutiny, enforcement actions, and legal challenges in various jurisdictions. The prospectus also pointed to concerns such as the centralized nature of World Chain’s sequencer, the inherent volatility of WLD’s price, and the possibility that regulators may categorize the token or related transactions as securities. Any unfavorable regulatory outcomes could adversely impact WLD’s value or even lead to the dissolution of the trust.
After the announcement of the ETF filing, WLD experienced an approximate 4% increase in value. Nevertheless, despite this uptick, the token remains significantly lower, about 97% below its peak of $11.80 reached in March 2024.