Author: Cosmo Jiang, Cody Poh Source: Pantera Capital Translation: Shan Ouba, Golden Finance
We have invested a lot of time in researching how blockchain can be integrated into the rapidly popularizing era of artificial intelligence, and the direction of "proving that it is a real person is particularly prominent. In the future, when artificial intelligence agents and AI-generated content are ubiquitous, the need to confirm that the other party is a real person and not a robot will increase significantly. While it is completely fine and even welcome to interact with robots in some occasions (even most occasions), there is an urgent need to authenticate independent real people in certain key scenarios (such as advertising, dating, and government services). So what is the best way to authenticate personal identity globally, censorship-resistant, and verifiable? The answer is permissionless blockchain.
World (formerly Worldcoin) is a blockchain protocol that is building a global, privacy-focused identity and financial network with a core concept of "Proof of Personhood". In other words, proving that someone is a real, unique human being. World uses the World Orb (an iris scanning hardware device) to identify the user's iris during the authentication process, and issues a World ID to each verified human, which is recorded on the Worldchain blockchain. Tools for Humanity (TFH) is the company that develops World technology and expands global users. WLD is the native token of the World protocol, which is planned to be used as a global Internet currency and governance token.
Sam Altman, CEO of OpenAI, is also a co-founder of World. He co-founded World because he foresaw that in a future full of AI content, there must be a way for humans to remain the focus, be verified, and enjoy respect. If widely adopted, World will provide a scalable, trusted, and privacy-preserving global solution for human and machine identities on the Internet, with the potential to expand economic opportunity and advance democracy around the world.
It has been an incredible year for our team to meet and interact with Sam Altman, TFH CEO Alex Blania, and the rest of the World team. World held its most recent public event on April 30th to showcase its product roadmap and growth strategy to investors and those interested in the space. Inspired by this, we’ve put together our investment thesis for World, how it’s been implemented, and where we see it going.
Investment Thesis Summary
We believe that World’s “proving you’re real” solution will become a critical infrastructure for a future where humans and AI coexist. The investment thesis for World can be summarized as follows:
Proof of person is a key tool:
When autonomous AI agents and AI-generated content emerge on a large scale, the demand for "real person uniqueness authentication" in commercial and public management scenarios will increase significantly. In extreme cases, if AI replaces human labor to a large extent, leading to changes in the employment structure and even the need to implement universal basic income (UBI), then solutions to prove that individuals are real people become indispensable.
Excellent verification solution:
World's biometric solution, secured by blockchain technology, is far superior to existing government and private identity authentication solutions in terms of cross-regional and censorship resistance.
Early growth signals are obvious:
In less than two years since its establishment, the World network has authenticated more than 12 million unique humans, and Worldchain has also shown good adoption momentum, with approximately 45,000 new wallets added every day.
Experienced leadership:
As one of the founders of OpenAI, Sam Altman has greatly enhanced World's ability to build trust, gain cross-border cooperation, and gain policy support on a global scale.
Application scenarios and future potential of World ID
We believe that "proof of person" is critical to many application scenarios, and World ID also has huge commercial potential after large-scale application, especially in large markets such as advertising and government services. The advertising market is worth a trillion dollars, and government services account for 25% of the U.S. GDP; providing even a small incremental value in these markets can bring huge growth opportunities to World.
Currently, World focuses on three scenarios: gaming, online dating, and social networking, and is committed to greatly improving the user experience by distinguishing between real people and robots. The agreement has established cooperation in these scenarios:
Gaming: Razer will launch Razer ID on the platform, and combine it with World to verify real players, thereby improving competitive fairness and experience. Razer ID will be launched in the game Tokyo Beast in the second quarter of 2025.
Dating: World recently announced a partnership with online dating giant Match Group to complete the verification of personal profiles through World ID, with the goal of significantly reducing robots and fake accounts and improving safety and trust.
Social: World launched World Chat on World App, which allows verified real people to communicate safely, and is negotiating cooperation with several large social media platforms.
Advertising: Hakuhodo, Japan's second largest marketing company, plans to use World ID to build an anti-cheating advertising network to eliminate machine-controlled advertising fraud.
The potential of World ID in the Mini App ecosystem is also impressive. World App has launched more than 300 Mini Apps, all of which can call World ID and World App wallet, providing a rich experimental venue for innovation and proof of concept. Some examples of applications with great potential include:
Kalshi: A prediction market Mini App that allows verified humans to bet on real events, building a more trusted and diversified market with verified users.
Aqua: A Mini App that relies on World ID to identify real human behavior, ensuring that content creators are rewarded based on real human interactions rather than machine behavior.
Worldle: A word guessing game between verified humans that allows verified humans to compete and bet on each other.
The World Chain network design gives verified humans additional advantages: the gas fees of real human accounts are partially paid by non-certified accounts (robots), ensuring that real people enjoy lower costs and greater benefits for commercial and application behaviors on the chain.
Expansion Strategy
World is a network whose value multiplies as the number of users grows. Currently, the World network has 12 million verified humans, and the focus is on acquiring more new users. Although incentives through free tokens are an early acquisition solution (similar to PayPal's $10 marketing in the past), the actual bottleneck at present is the physical verification link, because verification requires personal experience.
To overcome this limitation, World is vigorously promoting the large-scale manufacturing and cross-border distribution of Orb devices, with the goal of making it as popular as ATMs and greatly reducing the cost of manual intervention in the verification process. At present, the World team has developed a fully self-verified Self-Serve Orb, which makes large-scale cross-border verification possible; at the same time, the more portable Orb Mini is being developed, which is expected to be launched in 2026 and help exceed 100 million verified accounts.
After breaking through the verification limitations, the next step is to build more scenarios and applications to improve user stickiness and activity. As of now, the cumulative downloads of World App have exceeded 55 million. The huge Mini App ecosystem has provided impetus for new scenarios and new business models, and also provided great space for future user acquisition and retention.
In 2024, World made a breakthrough expansion in the United States, announcing its entry into the US market in May. The first batch of cities to go online include Atlanta, Austin, Los Angeles, Miami, Nashville and San Francisco. The company plans to deploy more than 7,500 Orbs in the United States by the end of 2025, and work with retail partners to deploy verification devices on a large scale in commercial places with dense passenger flow.
World's current goal is to complete the verification of 50 million people by the end of this year, and its long-term vision is to provide verification services for every independent human being in the world. The official provides a query page to help users find verification outlets nearby.
In addition, World recently launched its first commercial in the US, titled “Human and You Know It,” to showcase the concept in action.
Government Relations
While many people’s first impression of World is that it circumvents privacy laws and regulations, the opposite is true. In the past, World did encounter challenges entering certain markets, such as being asked to suspend operations in Hong Kong, Kenya, Spain, and Portugal. But in recent years, attitudes have begun to change.
One reason is that World actively engages in communication, popularization, and cooperation with local authorities and regulators, advocating for the understanding and acceptance of new technologies and new paradigms. Recently, World has made substantial breakthroughs in Southeast Asia’s digitally advanced markets, such as Thailand, the Philippines, and Indonesia, where World actively communicated with regulators before entering the market, introduced the technology and its privacy protection measures, and established a leading legal and public affairs team dedicated to addressing data privacy and compliance challenges.
A good example is World’s partnership with MyEG in Malaysia to provide Orb authentication at a large number of the latter’s service outlets. MyEG originally provided offline services such as driver’s license tests and identity card renewals, which has now become one of World’s technology landing scenarios, marking World’s ability and potential to connect with existing administrative infrastructure and jointly build digital identity standards.
Commercialization and potential upside
At the “At Las” launch event, World announced its initial vision for the future commercialization of World ID. The most basic commercialization approach is to charge transaction fees on the World Chain network, and another major focus is to charge fees for applications that call World ID services. The fee structure is divided into two parts: Authentication fees (to the authentication provider) and Protocol fees (to the World ID protocol). As an early investor, we are very encouraged by this value capture plan, which shows that the World protocol has been able to bring real and excess value returns to stakeholders.
Building an investment scenario with reasonable assumptions, when World completes the certification of 5 billion unique people (about 60% of the world's population) and calculates $5 per certified user per year, the annualized revenue of the protocol is expected to reach $25 billion. The per capita cost of $5 per year is 5 basis points lower than the global per capita GDP, which seems quite reasonable - in large markets such as global advertising, the certification services provided by World are fully capable of achieving this level of penetration. At a reasonable valuation multiple, $25 billion in annualized revenue and a nearly 100% free cash flow conversion rate means that the market value is expected to exceed $250 billion.
Conclusion
We are confident in the results that the World team is achieving. The protocol they built is precisely aimed at a key challenge of today and the future: the ability to identify independent real people in an era of rapid expansion of AI and increasingly blurred lines between real and artificial. Especially in the context of changing attitudes towards digital identity in many countries, World's successful expansion in the US market, and the implementation of World ID in different scenarios and regions, the opportunity facing World is extremely timely and huge.
Of course, the road to World's long-term goals is long, and there are a series of reasonable questions that need to be answered: Can it scale quickly? Does its incentive design work? Is its cryptocurrency overly affected by market cycles and volatility? Can it win in the context of traditional technology giants entering the digital identity market? After all, while decentralized and censorship-resistant solutions are more advantageous in theory, in reality they do not mean that they will be the ultimate winners.
However, as AI becomes more popular in business and society, World's significance in building a secure, stable, and universal digital identity authentication solution has become increasingly prominent, and has gradually been recognized by mainstream media and market consensus. In the past few months, The Wall Street Journal and Time magazine have published special reports, emphasizing that World is essential for real identity authentication in AI popularization, payment and social scenarios; BlackRock also mentioned the strategic significance of "human authentication" to the future construction of on-chain token economy in its annual shareholder letter.
Looking at the current progress, although World is still in its early stages, it has achieved an impressive development trajectory. A visionary and executive management team, with Sam Altman (OpenAI CEO) as chairman of the board, is steadily expanding the new world of digital identity authentication with a very ambitious and potentially huge vision. Looking ahead, we expect World to continue to expand into new markets, establish more strategic cooperation, and make the Mini App ecosystem flourish. As early investors, we are honored to be able to be part of it and are full of expectations for the future.
Kikyo
Weatherly
Catherine
Anais