TechFlow news — Michael Dempsey, partner at Compound VC, posted a tweet commenting on the controversy surrounding WorldCoin and major crypto funds.
-
He doesn't entirely dismiss the concept behind WorldCoin's "proof-of-personhood" approach but finds their launch valuation of $20 billion utterly absurd.
-
Large crypto funds need to justify investing tens or even hundreds of millions of dollars, leading startups to raise funds at $1–5 billion valuations before launch. However, in the current bear market, the market is unlikely to support such valuations.
-
When these funds' portfolio tokens launch, they're often dumped onto retail investors, undermining the project’s long-term vision and value—creating oversupply across the entire crypto space.
-
With lock-up periods expiring, the market simply can't absorb the massive sell pressure required by these funds over the next 2–3 years. If funds truly believe in a project’s long-term potential, they should lock up tokens for five years or more instead of dumping them.
