- World Liberty Financial proposed using up to 5% of its unlocked WLFI tokens to support partnerships for its USD1 stablecoin.
- About 80% of WLFI tokens sold to investors remain locked, causing concern among token holders.
- WLFI tokens have dropped roughly 60% since 20% were unlocked in September.
- The Trump family benefits significantly from the project’s token sale and stablecoin interest earnings.
On Thursday, World Liberty Financial, a DeFi protocol backed by the Trump family, put forward a plan to allocate up to 5% of its unlocked WLFI tokens to build partnerships aimed at growing its USD1 stablecoin. This move seeks to increase USD1 adoption, which the project states would enhance value for WLFI-governed initiatives and improve long-term token utility, according to the proposal.
The project holds roughly 20 billion WLFI tokens, valued at $2.6 billion, though the exact amount of tokens that are unlocked remains unclear. Approximately 80% of WLFI tokens sold to public investors are still locked, preventing them from being sold until the project’s team permits. Only a 20% portion was unlocked in September, allowing early buyers to partially liquidate their holdings.
Since that partial unlock, WLFI’s token price has fallen about 60%, eroding significant paper gains for investors who initially purchased tokens between $0.015 and $0.05. Many token holders have expressed frustration, fearing that using tokens as incentives could further devalue WLFI and harm those with locked tokens. Some have demanded transparency on the remaining unlock schedule before approving any proposals, with several forum comments reportedly deleted by moderators.
WLFI token holders do have voting rights on protocol changes, but the protocol is not a decentralized autonomous organization (DAO), so holders cannot propose changes themselves. This governance dynamic has contributed to dissatisfaction among the community, with calls for clearer communication.
Financially, the Trump family benefits substantially from the project. Over $400 million raised in WLFI token sales went to DT Marks DEFI LLC, a firm owned 70% by Donald Trump and 30% by his family. Additionally, the project is expected to generate about $100 million in interest from the assets backing the USD1 stablecoin, with 75% of that income directed to DT Marks, as outlined in the Gold-paper.pdf”>project’s documentation.
While some token holders oppose the latest spending proposal, others back it, arguing it supports long-term utility and adoption rather than short-term price movements. As one governance participant noted, “Using a portion of the WLFI treasury as incentives to accelerate USD1 adoption is a smart, long-term decision focused on building real utility: not short-term price action,” adding, “When our products scale, the whole community benefits.”
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