Journalist
Posted:
- Market depth has been on a downward trend since mid-September.
- Rehiring Sam Altman could result in another period of volatility for WLD.
World currency [WLD] has seen significant volatility lately, largely tied to the layoffs and rehires of founder Sam Altman.
When news of the tech entrepreneur’s resignation became public last week, WLD plummeted more than 15%, noted AMBCrypto from CoinMarketCaps facts. However, as the drama expanded with speculation about its comeback, biometric crypto began to recover.
And boy, oh boy! The saga only got more interesting when OpenAI announced an agreement that could pave the way for Altman’s return to the AI research company.
We have reached an agreement in principle for Sam Altman to return to OpenAI as CEO with a new board consisting of Bret Taylor (Chairman), Larry Summers and Adam D’Angelo.
We’ll work together to find out the details. Thank you very much for your patience with this.
— OpenAI (@OpenAI) November 22, 2023
While WLD was trading at $2.4 at the time of writing, a sharp pump north may be likely given how strongly the currency has reacted to such developments lately.
But what could explain the sharp increase in the token’s volatility?
This could be the reason
According to crypto market data provider Kaiko, WLD’s decline in market depth could have significantly contributed to the token’s fluctuations. Data shows that market depth has been on a downward trend since mid-September.
Source: Kaiko
Market depth is the ability of an exchange to absorb relatively large market orders without materially affecting the price of the asset. Simply put, it is a measure of market liquidity.
It is the market makers who provide most of the liquidity on the exchanges. During the launch, the makers of Worldcoin lent approximately 100 million euros to five market makers.
However, as part of the change agreementsthe loan amount was reduced to 75 million, with Worldcoin giving market makers the option to return 25 million WLD or buy it at a certain market price.
Read World currencies [WLD] Price prediction 2023-2024
AMBCrypto found that WLD’s price on October 24 was $1.67, far less than the purchase price set in the agreement. As a result, market makers started returning the loan amount.
The decline in WLD’s circulating supply, from over 134 million at launch to just over 116 million at the time of going to press, added more weight to the above findings.