Pantera Capital: Why We Invested in Worldcoin?
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Pantera Capital: Why We Invested in Worldcoin?
If successful, its "Big Hairy Audacious Goal" (BHAG) will unlock order-of-magnitude growth potential.
Navigating Web3 tides with focused insightsAuthor: Cosmo Jiang, Cody Poh
Translation: TechFlow
We have been exploring how blockchains can integrate into a world rapidly embracing AI, where “proof-of-human” stands out as a key area. In a future increasingly populated by AI agents and AI-generated content, distinguishing humans from bots will become an urgent necessity. For many use cases, we may accept—or even prefer—interacting with bots. However, in critical domains such as advertising, dating, or government services, verifying unique real human identities becomes especially important. Using permissionless blockchains to verify online "humanness" in a global, censorship-resistant manner is undoubtedly one of the best options available.
World (formerly Worldcoin) is a blockchain protocol building a privacy-preserving global identity and financial network based on the concept of “proof-of-human”—a method to prove that someone is both human and unique. World uses its biometric device, the “World Orb,” to scan users’ irises and verify them as unique individuals, issuing each user a World ID on its blockchain, Worldchain. This technology, developed by Tools for Humanity (TFH), is being rolled out globally. The protocol’s native token, WLD, is designed to function as a global internet currency and for governance within the protocol.
Sam Altman, CEO of OpenAI, is also a co-founder of World. He founded World with the vision of preserving human uniqueness and centrality in an internet increasingly dominated by AI-generated content. If widely adopted, World could provide a scalable and reliable global solution for distinguishing humans from AI while protecting user privacy. This capability has profound implications—not only expanding economic opportunities but also advancing global democratic processes.
Since our investment last year, we’ve had the privilege of meeting with Sam Altman, TFH CEO Alex Blania, and other team members. On April 30, World hosted a major public event, offering investors and industry participants deep insights into its product roadmap and growth strategy. This moment presents an ideal opportunity to share our investment thesis and preview upcoming exciting developments.
Investment Thesis Overview
We believe World’s proof-of-human solution will become critical infrastructure in a future where humans and AI coexist. Our investment rationale rests on several key pillars:
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Proof-of-Human as a Critical Tool: As autonomous AI agents and AI-generated content proliferate, verifying unique human identities becomes essential for commercial and governmental applications. In extreme scenarios where AI-driven productivity displaces human labor, governments may need to implement universal basic income (UBI) programs—making proof-of-human an indispensable tool.
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Superior Verification Solution: World’s biometric approach combined with blockchain technology surpasses existing government and private identity systems by operating across jurisdictions and resisting censorship.
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Early Growth Signals: In less than two years since launch, the World protocol has verified over 12 million unique individuals. Adoption of Worldchain is also growing strongly, with approximately 45,000 new wallets created daily.
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Experienced Leadership: World benefits significantly from the involvement of OpenAI founder Sam Altman. His global influence and credibility are powerful assets for building trust with international government institutions and forging strategic partnerships.
World’s vision extends beyond technological innovation—it reflects a profound rethinking of future societal structures. At the intersection of AI and blockchain, it may become the vital bridge connecting humanity and technology.
World ID Use Cases and Potential
We believe proof-of-human is crucial for numerous applications, and World ID holds significant potential for large-scale commercial adoption. Particularly in advertising and government services, World ID can generate substantial value. Given the scale of these end markets—advertising being a multi-trillion-dollar industry and government services accounting for 25% of U.S. GDP—even small incremental value added through unique human identity solutions represents a massive growth opportunity for World.
In the near term, World has identified gaming, dating, and social networks as three core use cases where distinguishing unique humans from bots significantly enhances user experience. The protocol has already established partnerships in these areas:
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Gaming: Razer is collaborating with World to launch Razer ID, verifying authentic players to enhance fairness in competitive gaming. Razer ID will debut in the game *Tokyo Beast* in Q2 2025.
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Dating: World recently announced a partnership with Match Group, a global leader in online dating, allowing users to verify their profiles via World ID. This initiative aims to reduce bots and fake accounts, improving safety and trust.
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Social: World launched World Chat within the World App, enabling verified users to connect and communicate securely. World is currently in discussions with several major social media platforms for collaboration.
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Advertising: Hakuhodo, Japan’s second-largest marketing agency, plans to use World ID to build a fraud-resistant advertising network, aiming to eliminate bot-driven ad fraud.
World’s Mini App ecosystem plays a crucial role in unlocking new possibilities and applications for World ID. Currently, over 300 Mini Apps on the World App can leverage World ID and the World App wallet, fostering creative experimentation and proof-of-concept development. While the full potential of future applications remains untapped, early experiments show promising results:
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Kalshi: A prediction market Mini App allowing verified humans to bet on real-world events. As more authenticated users participate, platform credibility increases, creating deeper and more diverse markets that help the public better understand prevailing opinions.
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Aqua: This Mini App uses World ID to measure verified human engagement online, ensuring content creators are compensated based on genuine user interactions rather than bot activity.
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Worldle: A Wordle-style competition Mini App where verified humans can place bets and compete against each other.
The design of World Chain itself provides distinct advantages to verified humans. Gas fees for verified humans are subsidized by fees collected from non-verified users (i.e., bots), ensuring that humans benefit economically from increased commercial activity generated by on-chain agents.
Distribution Strategy
World is a network, and network value grows with user count. Currently, the network is still in its early stages, with 12 million verified users—making user acquisition the top priority. Free token incentives resemble PayPal’s early “$10 growth hack” strategy. However, because initial verification requires in-person biometric authentication, the current bottleneck lies in the physical distribution of devices. Scaling World to its next 100 million users hinges on improving the scalability of Orb manufacturing and cross-jurisdictional deployment.
To achieve this, World is accelerating Orb production, aiming to make the devices as widespread and accessible as ATMs. The team has developed a self-service Orb model, enabling users to operate it independently without staff assistance—facilitating global mass deployment and reducing operational costs. Additionally, World is developing a more portable verification device called Orb Mini, designed to resemble a smartphone. Orb Mini is expected to be deployed in 2026 and could become a key tool for scaling the network beyond 100 million users.
After driving verification through physical rollout and economic incentives, the next challenge is improving user retention by building compelling real-world applications. Expanding the Mini App ecosystem is critical for sustained user growth and engagement. To date, the World App has surpassed 55 million downloads, and this ecosystem is gradually becoming a foundation for daily user interaction, providing scalable leverage for accelerated user acquisition. We are already seeing interesting applications emerge across DeFi, gaming, and social media.
We view the recent U.S. launch as a pivotal growth unlock. In May, World announced its U.S. rollout, initially covering six cities: Atlanta, Austin, Los Angeles, Miami, Nashville, and San Francisco. World plans to deploy 7,500 Orb devices across the U.S. by the end of 2025. It also expects to offer Orb devices in high-density retail locations nationwide through co-marketing initiatives with retail partners.
World aims to verify 50 million people by the end of this year, with a long-term vision of enrolling every unique human on Earth. You can find nearby scanning locations here.
Additionally, World recently launched its first U.S. commercial advertisement titled *Human and You Know It*. You can watch the ad here.
Government Relations
Many still believe World circumvents privacy laws and government regulations, but the reality is quite the opposite. This misconception stems from past regulatory actions. Cautious regulators previously challenged World’s expansion, requiring it to pause operations in certain regions, including Hong Kong, Kenya, Spain, and Portugal.
In recent years, regulatory attitudes have shifted positively. This change is driven by multiple factors, including enhanced education and outreach by TFH (The Foundation for Humanity) to local governments, as well as the accelerating adoption of AI, which has led stakeholders to recognize the need to openly learn and adapt to new paradigms.
Recently, World has made significant progress in partnering with local governments, particularly in fast-digitalizing Southeast Asian markets like Thailand, the Philippines, and Indonesia. Before entering these markets, World proactively engages government officials to ensure they fully understand the platform’s technology and built-in privacy protections. To meet data privacy and storage requirements, World has assembled a top-tier legal and public policy team.
A successful example is World’s partnership with MyEG, a Malaysian government service provider offering offline services such as driver’s license tests, ID applications, and renewals. By integrating Orb verification into MyEG’s existing government infrastructure, this collaboration demonstrates World’s ability to embed its technology within public services—setting a precedent for future partnerships.
Monetization and Growth Potential
At the “At Last” event, World began outlining its monetization strategy for World ID. At the most basic level, revenue comes from transaction fees on World Chain. Additionally, World introduced World ID service fees charged to applications using World ID. These fees consist of two components: Credential Fees, retained by credential issuers, and Protocol Fees, which accrue to World ID. As foundational investors, we are excited by World’s disclosed value accrual plan, as it signals the protocol’s ability to generate outsized value for stakeholders.
With reasonable assumptions, a compelling investment case emerges. If World verifies 5 billion unique users (around 60% of the global population) and generates $5 per year in revenue per verified user, the protocol could achieve $25 billion in annualized revenue. This $5 represents less than 0.005% of global per capita GDP—a modest share, especially considering World’s applicability across massive markets like advertising.
With a reasonable growth multiple and nearly 100% free cash flow conversion, this $25 billion in annualized revenue could support a market capitalization exceeding $250 billion. These figures illustrate the vast commercial potential and future market value of World ID on a global scale.
Conclusion
We are confident in the trajectory World’s team is building. The protocol uniquely addresses the critical challenge of verifying unique human identity in an era of rapid AI advancement. This opportunity is especially timely, coinciding with shifting government attitudes toward digital identity, World’s recent entry into the U.S. market, and the growing adoption of World ID across diverse regions and use cases.
Of course, there remains a long journey from today’s state to realizing World’s long-term vision. Questions remain about whether the protocol can scale quickly enough, the effectiveness of its growth incentives, and the reflexive impact of its volatile cryptocurrency. Moreover, World is not the only institution recognizing the importance of “human identity” as foundational infrastructure—most major tech companies are developing their own identity solutions. While decentralized, censorship-resistant solutions are theoretically superior, that does not guarantee victory in practice.
As AI becomes more pervasive, there is growing recognition that World’s mission—to build a robust and secure identity verification system—is meaningful and worth pursuing. Over the past few months, both *The Wall Street Journal* and *TIME* magazine have featured in-depth stories on World, highlighting its role in a future where AI agents are ubiquitous and indistinguishable, particularly in payments and social networks. BlackRock emphasized the strategic importance of “human identity verification” in its annual shareholder letter, especially amid rising on-chain economies and asset tokenization.
Although still in its early days, World is undeniably led by an exceptional management team chaired by Sam Altman. If successful, its “Big Hairy Audacious Goal” (BHAG) could unlock exponential growth. Looking ahead, we look forward to continued progress in geographic expansion, strategic partnerships, and strong growth in the Mini App ecosystem. As investors in this protocol, we feel both excited and honored to be part of this journey.
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