The identity track unicorn is questioned: Worldcoin faces longest challenges, and the founder of Humanity is exposed to the history of failed entrepreneurship

By Nancy, PANews

Recently, after the Blockchain identity platform Humanity Protocol announced that it had received $30 million in financing at a valuation of $1 billion, the CEO was revealed to have founded a unicorn company Tink Labs and went bankrupt, causing hundreds of millions of dollars of investors’ funds to be lost. At the same time, Worldcoin, which also belongs to the DID track, is controversial due to the upcoming huge Token unlock, global regulatory setbacks, and the failure of OpenAI’s blessing effect.

The new unicorn Humanity Protocol is off to a bad start, Worldcoin is mired in word-of-mouth and business development difficulties, and the two major $1 billion market capitalization unicorns in the DID track are facing a new test.

**DID protocol using ** palm recognition technology, CEO Zeng Zhi founded a former unicorn company bankrupt **

Humanity Protocol is considered to be the same track project as Worldcoin.

Established in 2023 as a Polygon CDK-based identity system, Humanity Protocol was developed by the Human Institute, Animoca Brands, and Polygon Labs to provide an accessible and non-intrusive way to build human proofs in Web3 applications. Humanity Protocol plans to launch a testnet in the second quarter of this year, and its waiting list has exceeded 510,000 people.

In terms of biometrics, unlike Worldcoin, which uses iris scanning, Humanity Protocol uses palmprint recognition, which is considered a less intrusive authentication scheme. However, iris recognition has the advantages of uniqueness, stability and non-replicability of identity recognition compared with palmprints, and has more advantages than other biometric technologies in terms of comprehensive security performance, and due to the high requirements for the accuracy and stability of this technology, the difficulty of development and the cost of research and development are also large.

In terms of complete ownership of user data and identity, Humanity Protocol, like Worldcoin, has introduced zk-SNARKs technology; In terms of financing background, Worldcoin has completed longing rounds of luxury financing, but its valuation of 1 billion has been realized in Series A financing, and Humanity Protocol has also completed longing rounds of financing. At present, Humanity Protocol has officially announced that it has received a $30 million seed round led by Kingsway Capital and participated by long 200 institutions including Animoca Brands, Blockchain.com and Shima Capital, and has raised about $1.5 million among a group of KOLs, according to PANews, the KOL round is valued at $60 million.

Not only that, but Humanity Protocol is just as easy to access on smartphones as Worldcoin. The project will release an app that uses a phone camera to scan palm prints for identity verification, and will later introduce another layer of security, using a network of palm veins and a small infrared camera for identification. In the future, this system is expected to be applied to the KYC process of financial platforms, and even to enter physical places such as hotels and office buildings through palm prints. In addition, Humanity Protocol plans to issue tokens to pay for verification fees.

Commenting on the launch of the project, Polygon co-founder Sandeep Nailwal commented that Humanity Protocol is not only truly resistant to Sybil attacks, but also natively integrates verifiable credentials into a network of Decentralization validator Nodes, laying the foundation for building a wider range of Blockchain and real-world applications.

After attracting market attention due to its high valuation, Terence Kwok, CEO of Humanity Protocol, was later reported by foreign media Protos to reveal that the smartphone company that had almost bankrupted its $1.5 billion valuation and burned $170 million of investors’ funds.

It is understood that Terence Kwok founded Tink Labs, headquartered in Hong Kong in 2012, with 12 million users worldwide, and has received joint investment from FIH Group (a subsidiary of Foxconn Technology Group), Kai-Fu Lee’s Innovation Factory and Meitu Chairman Cai Wensheng, mainly to provide hotels with smartphones for guests to use during their stay, with the goal of providing guests with an alternative to roaming fees to improve their hotel experience and sell the collected customer preference data. Interestingly, one of the reasons behind Tink Labs’ acquisition of heavyweight shareholders is that Terence Kwok’s father, Guo Desheng, is a former Goldman Sachs star private banker, and his major clients include Lee Shau Kee, Kwok Henian and other super-wealthy.

According to the Financial Times, Terence Kwok began to lose money for longest reasons, including aggressive expansion policies, roaming fees becoming cheaper and more popular, and hotels not wanting to pay for the phones he gave away, with losses of nearly $200 million in 2017 and 2018 alone, and then a liquidity crisis. SoftBank, an investor in Tink Labs, was concerned that the company was “moving funds from the Japanese joint venture to other regions to maintain operations,” forcing the company to abruptly halt a major project, according to a former employee. Kwok allegedly struggled to pay its employees and contractors and eventually made mass layoffs before closing Tink Labs on August 1 of that year. In January 2020, Tink Labs’ European division began liquidation, followed by bankruptcy proceedings.

The former head of HR operations at Tink Labs said, “I never thought it would last, but I didn’t expect it to close so soon, Kwok only cares about ‘making money.’” According to a previous report by Fortune Insight, Terence Kwok also said during the startup of Tink Labs, “Once the business fails, you can return to school, the opportunity cost is the lowest, and starting a business for three months is like studying an MBA.” ”

Worldcoin** is about to unlock large Tokens, facing regulatory investigations in longest countries**

While Humanity Protocol is being hotly debated in the market, Worldcoin is in dire straits due to issues such as Token unlocking, regulation, and insider cash-outs.

According to the analysis released by Decentralized Finance researcher @DefiSquared on the X platform recently, Worldcoin may become the largest wealth transfer event in this cycle, and Worldcoin has a serious inflation problem, with a fully diluted market capitalization of Token WLD as high as $60 billion, which depreciates by 0.6% per day due to the token issuance of issuance and operator claims, and the unlocking volume of WLD will increase significantly in the next few months, which may lead to a large-scale sell-off.

According to @DefiSquared analysis, on the one hand, the supply of WLD will increase by 4% every day once Worldcoin’s VC and the team’s Token start unlocking. According to Token Unlocks data, WLD will face $31.5 million per day selling pressure starting July 24 (based on May 16 prices).

At the same time, not long ago, Worldcoin revealed on its blog that World Assets, a subsidiary of the foundation responsible for token issuance of the project, will sell 500,000 to 1.5 million WLD per week for private sale for the next six months, with a maximum value of $179 million at current value. @DefiSquared pointed out that this portion of the Token is equivalent to 16.7% of the existing circulating supply (based on 210 million Circulating Supply on May 16) and is sold at a discount, with this portion of the WLD Token supply being used to sell to counterparties for the benefit of the Foundation.

"Worldcoin’s Token Economics model was designed from the start to be predatory to benefit teams and early investors. In December last year, the foundation even deliberately terminated the market maker contract (note: Worldcoin previously announced that it would terminate the protocol with 5 market makers on December 15, 2023), allowing the price to be squeezed up at a low Circulating Supply. "According to CoinGecko’s latest research data, WLD is one of the four encryption projects with the lowest circulating supply among the top 300 market capitalization**. In this regard, @DefiSquared believes that this manipulative design of low liquidity and high valuation directly benefits insiders, as they can lock in shares through contracts and OTC Trading Hedging high valuations before unlocking.

In addition, @DefiSquared also noted that most long retail investors may not even know that Sam Altman (CEO of OpenAI) is no longer actively involved in Worldcoin and that the project has no relationship with OpenAI. According to a Bloomberg report in April this year, at that time, Worldcoin was looking for cooperation with tech giants such as OpenAI.

It is worth mentioning that Worldcoin is also facing regulatory bans or investigations in longest places around the world such as Spain, Portugal, South Korea and Hong Kong due to user data privacy issues, so Worldcoin’s main supporters not only met with relevant governments to improve government relations, but also open source iris recognition inference system this year to enhance transparency and implement a new personal data self-custody strategy, and recently open source the new SMPC system and securely delete old iris code to help improve biometric data security. Similarly, for Humanity Protocol, it may also face regulatory issues arising from the collection of user data.