- World Liberty Financial's new proposal has split opinions.
- The project wants to spend WLFI on partnerships to boost its USD1 stablecoin.
- 80% of the WLFI tokens sold to investors are still locked.
World Liberty Financial wants to start spending tokens — but not everyone agrees it’s a good idea.
On Thursday, the team behind the Trump family-backed DeFi protocol proposed using up to 5% of its unlocked WLFI token stash to help forge partnerships for USD1, the protocol’s dollar-pegged stablecoin.
“Increased USD1 adoption creates more opportunities for value capture across the WLFI ecosystem, which accrues to the benefit of WLFI-governed initiatives and long-term token utility,” World Liberty said in a governance forum post.
World Liberty holds approximately 20 billion WLFI tokens, valued at $2.6 billion.
It’s not clear what portion of these tokens are unlocked, however.
While the proposal has received some support, it has also generated backlash from dozens of token holders.
They argue that giving away tokens to secure partnerships will harm locked holders by crashing the WLFI token’s price, turning their paper profits into unrealised losses.
World Liberty Financial sold $550 million in tokens to the public over a months-long sale that ended in March. Those tokens were sold locked, meaning buyers cannot sell them until the project’s team decides they can.
Token holders bought their WLFI tokens for between $0.015 and $0.05, meaning they are technically up many multiples on their investments.
In September, the team behind the project unlocked 20% of the WLFI sold through its token sale, letting early buyers partially cash out. The remaining 80% of tokens remain locked.
Since then, WLFI has plummeted some 60%.
As the token continues to fall, buyers are growing restless as their paper gains erode before their eyes.
‘Ghosted the community’
World Liberty Financial’s WLFI token lets holders vote on changes to the protocol. But the protocol isn’t a DAO, and token holders cannot create their own proposals.
This has led to frustration among some token holders who feel the project’s team is not representing them.
“Prior to any governance vote, give us clarity about unlocking, vesting schedule for our remaining 80%!” one token holder said in the governance forum. “You have ghosted the community about this matter for five months.”
“Until you release a roadmap for the remaining 80% unlock I’ll be using my vote to block whatever proposal benefits you,” another token holder said.
Dozens more replies have been deleted by forum moderators.
Trump profits bigly
At the same time, the Trump family, the primary beneficiaries of World Liberty Financial, has profited greatly from the venture over the past year.
Just over $401 million generated through the WLFI token sale goes to DT Marks DEFI LLC, a firm in which President Donald Trump owns 70%, while his family owns the remaining 30%.
World Liberty is also set to bring in around $100 million in interest from the assets backing its USD1 stablecoin, 75% of which goes to DT Marks, per the project’s documentation.
To be sure, not all token holders are against the latest spending proposal.
“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,” one governance participant said.
“When our products scale, the whole community benefits.”
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
