Issuing Sentience Credits to every verified human in the world
August 09, 2024
I really like Worldcoin. It represents a new class of hardware at the intersection of open-source, cryptography, and civics. When democracy finally does run on blockchain, it will be descendant of Ethereum and Worldcoin, and nothing else that exists today will have a leaf in the ancestral tree.
That said—even in the present—Worldcoin holds some surprising datapoints. As of August 2024, there are more unique wallets holding $20 of Worldcoins (1.9M) on OP mainnet than there are unique wallets holding 20 USDC on all ethereum networks combined. With just over 6 million people registered (and some not able to claim due to country restrictions), Worldcoin converts non-cryptonatives to WLD store-of-value at a rate of about 1 in 3.
That said, a lot of people absolutely hate Worldcoin. ZachXBT, a generally credible sleuther of onchain data, has posted many times about the supposed moral swamp that is Worldcoin, including "send this scam to zero with haste 🐻 🎯".
Most in-the-know Worldcoin haters are focused on railing against 2021-era "Samcoin" tokenomics, which invovled issuing tokens with large total supplies but little circulation. Samcoins mimicked the appearance of robust, high-marketcap tokens to pull in investors—but, under the hood—their prices were easily manipulated by insiders with large percentages of the tokens actually outstanding in the market.
Viewing WLD as a Samcoin is indiscriminate pattern matching. Worldcoin is attempting to use a unique, long-term distribution vector to create a new store of value. It's not possible to airdrop tokens to every person on the planet over the course of 15 years without initially low float. Here is not the place for further detail, but I think this distribution -> store-of-value pipeline will be successful in the long run.
Anyway, my true interest is to discuss WorldID applications. WorldID is the humanity credential that users recieve after scanning their iris with the Worldcoin Orb. WorldID lets users generate zero-knowledge proofs that they have access to a private key corresponding to a real human.
Right now there's a divide between applying proof-of-humanity to traditional user identity problems—for example, signing into Discord—and using WorldID to distribute global value—for example, sending everyone $1000 of UBI. The former is underwhelming, the latter only relevant in a distant future.
For the products we use today, proof-of-humanity is helpful, but there's not quite enough at stake to demand it. Instagram doesn't need robust human verification to prevent fake likes, because likes are not that valuable in the first place, so it doesn't really matter if some accounts have a swarm of fake ones. A small but perceptible error rate on fake-like detection doesn't wreck the system.
On today's blockchains, however, there are more significant value distributions at stake and much higher premiums on privacy. Here, I believe we can use WorldID to distribute new kinds of resources to people.
Humanity as a distribution vector
Anyone who signs up for WorldID in an eligible country can claim free, recurring airdrops of WLD tokens. Like I mentioned above, this is really interesting as a credible, neutral, extremely broad premine. It's the obvious thing to do when given the set of all humans encoded in blockspace.
In April, Worldcoin announced the launch of their own L2 on OP Stack: World Chain. On World Chain, verified humans get free compute credits—making it the only smart contract network where people can onboard to full self-custody and call non-permissioned smart contracts entirely for free and without any KYC or relationship to a sovereign monetary system.
So, with WorldID we can give away two things:
- Tokens
- Blockspace
In both cases, we take a resource that's controlled by some authority and give it away on the basis of humanity. There are other basic use cases like this—where humanity equates to a resource claim—such as giving away voting power and promotional vouchers. Here 1 person = 1 airdrop; 1 person = 1 vote; 1 person = 1 free trial; etc.
However, WorldId also presents an interesting opportunity to flip this authority <> humanity dynamic. Instead of some controlling body sharing a resource equally on the basis of humanity, we can create resources that are controlled by humanity and distributed according to individuals’ subjective preferences.
I've been thinking about this as human-scale scarcity, because it allows us to create resources that reflect the scarcity of time and energy experienced in daily, human life. These kinds of resources could allow people to express how much they value something—in the context of robust, economic scarcity—without requiring them to spend real money.
For example, we could create "Energy", a resource which every human is entitled to spend at a rate of 365 units per year.
We might choose a single-use, ephemeral version of Energy, where users cannot save their Energy across multiple months, and where Energy isn't transferable once spent. This form of Energy probably performs like a voice credit, used to signal preferences across a range of options. For example, it could signal interest in various token communities. This way, projects and investors can know the scope of real human interest in particular tokens, making for more efficient token launches and fewer simulated, fradulent markets.
Or, maybe we extend the Energy spending window into multiple years. Let's say users still have 365 units of Energy per year, but all Energy for calender year 2024 can be spent through the end of 2025. Here, Energy could function more as a human-scale unit of account. Maybe this could be useful for pricing things with low/zero marginal cost, and it performs as a more divisible, expressive proof of humanity. For example, if I make a binary proof of humanity, I could claim 3 WLD per month, but if I spend all my Energy on WLD, I can claim up to 30 WLD per month.
As of yet, I'm not sure what's the best thing to do with these types of resources, which I've been calling Sentience Credits. They're primarily constrained by the limited scope of WorldID and WorldID adoption, which, when combined, offer a really great, integrated wallet experience with a strong base asset, but a fragmented user base with little crossover into western crypto culture and very low visibility into user identity across time (WorldIDs can be reset every 14 days).
Additionally, there's an inherent information -> speculation tradeoff that creates a cold-start problem and would need empirical refinement. If SCs only transmit information, there's not enough incentive to spend them. At the same time, SCs won't control real value flows until they prove to have some informational value.
Broadly, Sentience Credits should be able to play some role in facilitating information markets against a particular backdrop. I have long been interested in structuring markets for new stores of value. In this context, Sentience Credits could facilitate interest markets for various tokens. If done correctly, this could work as a sort of free-to-play DEX, where users get access to some finite amount of credits to spend incubating tokens, and the successful ones graduate into real, liquid markets.