Risk Disclosure Statement

World Foundation, together with our subsidiary entities (collectively, “World” or “we”, “us” or “our”), was established to build and steward the World protocol, a combination of software applications, hardware devices, blockchain-network based smart contracts, digital assets, and associated rules and procedures (together, the “Protocol”). Our objective is to implement the world’s largest decentralized identity and financial network (the “Project”). The Protocol is primarily designed as an open-source public utility, accessible to any interested user. Central to the Protocol are a privacy-preserving global identity network known as World ID (“World ID”), and a crypto asset, the Worldcoin token (“WLD”). Users of World ID will be able to participate in guiding the governance of the Protocol and contribute to the Project alongside a global community of developers, economists, technologists, and other participants. WLD tokens may also be used for payments.

The Protocol and its elements, including the WLD token, are experimental technologies. The goal of the Project is rapid decentralization, whereby significant governance decisions will be community-driven. Consequently, uncertainties exist about these technologies' functionality at scale and global user acceptance and utility.

Before engaging with the Project, whether by accepting grants of WLD from World or acquiring WLD tokens in secondary transactions, you should carefully read the following information to fully understand the Project's objectives and associated risks. The Project and WLD tokens are intended only for informed users above the applicable legal age who can accept potential benefits and related risks. The Project is provided by us on an “as is” basis, without warranties. Further important disclaimers and legal liabilities are detailed in our Terms of Service.

WLD tokens enable Protocol interaction and may in the future facilitate payments. They confer no ownership rights in World or any other entity and do not represent equity interests or entitlements to dividends or distributions. WLD tokens are not investment products; no expectation of future profit or gains should be anticipated from their purchase or sale.

WLD tokens may have no immediate monetary value. Trading markets for WLD tokens, if developed, could be highly volatile and influenced by Project-specific factors, broader cryptocurrency market conditions, and geopolitical or macroeconomic events. Users should only hold WLD tokens they are willing to potentially lose entirely.

Purported market prices for WLD tokens may not reflect actual tradable prices available in your jurisdiction and could be distorted due to manipulative activities, including self-dealing or wash-trading, complicating their valuation for commercial transactions. Regulatory changes could impact available marketplaces for token disposal.

Although certain major retail and commercial entities have begun accepting digital assets as payment, such usage remains limited. Significant crypto demand remains speculative. For the Project to succeed, global Protocol engagement and adoption are necessary; failure to achieve this could result in minimal or no monetary value for WLD tokens.

WLD tokens are ledger entries at blockchain public addresses (e.g., World Chain, Optimism network), controlled via private keys. Loss or compromise of private keys stored in software, hardware wallets, crypto marketplaces, or other means will result in permanent, irretrievable loss of tokens. Unauthorized access by third parties can similarly result in irreversible misappropriation. Neither we nor other entities can recover lost WLD tokens.

Currently, WLD tokens are primarily distributed by us via the World App, the first Protocol-compatible wallet operated by Tools for Humanity Corp, a U.S.-based entity involved in Project development. The World App is a self-hosted wallet; neither we nor any third party can access your private keys. Loss or compromise of private keys or login credentials to hosted wallets will lead to permanent token loss. Errors or malfunctions related to digital wallets or vaults, or improper token purchase and receipt procedures, can similarly result in token loss.

The tax treatment of WLD tokens is uncertain across many jurisdictions. Users should consult their tax advisors regarding ownership and usage implications. Transactions involving WLD tokens, including purchases, sales, or payments, may trigger adverse tax consequences such as withholding, income, or capital gains taxes, and reporting obligations. Uncertainty in tax treatment may deter commercial acceptance or token trading, potentially reducing WLD tokens' monetary value.

The regulatory framework governing the Protocol and WLD tokens remains uncertain in many jurisdictions. Regulatory developments or enforcement actions could adversely impact WLD tokens, including determinations of unlawful verification methods, regulatory classification requiring registration or licensing, or liabilities arising from token-holder governance participation. Such determinations could halt WLD distribution or the Project entirely.

Public policy toward cryptocurrencies and token distributions is evolving. Regulators may broaden regulatory oversight or interpret existing regulations unfavorably for the Project. Jurisdictional requirements for token registration or licensing could negatively affect token utility, potentially impacting our ongoing Project support.

Certain jurisdictions, including the European Union (MiCA framework), have enacted laws directly impacting crypto asset distribution and trading. Proposed legislation in the U.S. Congress may similarly affect crypto asset functionalities. Such laws or regulations could negatively influence Protocol operations and WLD tokens' utility.

The Protocol’s underlying technology may contain flaws or fail to operate as intended, potentially diminishing user utility and limiting new user engagement. Protocol coding errors or unintended functionalities may adversely affect WLD tokens. 

The Protocol may face malicious cyberattacks or exploitable code vulnerabilities, compromising security functionality. 

The Protocol’s open-source structure and the various software applications and other interfaces built on the Protocol are still in an early development stage and are unproven. We are not able to provide you with assurances that the Protocol and the means of creating, transferring, or storing WLD tokens will be uninterrupted or fully secure. This may reduce the interest in, or use of, the Protocol and the WLD tokens. The Protocol or the WLD tokens could be subject to security attacks, including double-spending or 51% attacks, which could materially harm WLD token holders or Protocol. Social or presentation attacks and hardware vulnerabilities could similarly compromise Protocol security, damaging the Project’s reputation and reducing user adoption.

As part of the Project, we, or Tools for Humanity on our behalf, may collect certain categories of personal data, including sensitive personal data, for permissible purposes such as to comply with any applicable legal KYC/AML requirements. Any failure to prevent or mitigate security breaches or improper access to, use of, or disclosure of any such data could adversely affect the Project, including through a diminished ability to retain or attract new users, and disruption to our operations. 

The global benefits of the Protocol depend on the successful ongoing operation of Orbs to onboard new users. Operating Orbs may be unfamiliar to both operators and users in various jurisdictions and Orbs could be misused by those operating them.

There can be no assurance that Orb operators, users or other third parties will be able to operate the Orbs properly. Any accidents, injuries or damages resulting from such failure to operate the Orbs properly could harm the Project. 

Project success heavily depends on producing, distributing, and maintaining Orb hardware devices and related software, which generate unique World IDs. We rely on Tools for Humanity for manufacturing and distribution under a limited license. Supply chain disruptions, inadequate manufacturing capacity, or cost overruns could delay onboarding processes, reducing global interest, confidence, and the monetary value of WLD tokens.

We depend on third-party providers for identifying and vetting Orb operators. Interruptions in these third-party services could impair our ability to support the Protocol. Qualified operator availability may be limited due to economic feasibility or prohibitive operational costs, potentially hindering Protocol adoption.

Security or data privacy breaches, including unauthorized access or misuse of user data collected by us or third-party providers, could disrupt or terminate Project functionality, adversely affecting user retention and operations.

The successful global operation of Orbs to onboard users involves risks related to misuse by operators or inexperienced users. Misoperation could cause injuries, property damage, or reputational harm, leading to legal claims against us. While third-party providers administer operator qualifications, their processes may not expose all relevant information, creating risks of criminal activity or misconduct. Negative press or user perceptions of Protocol safety could significantly harm adoption and viability.

Please carefully consider these risk factors when engaging with the Project or WLD tokens.