Controversial WLFI token vesting proposal triggers 14% price decline
Despite securing 99.95% voter support, the plan to vest more than 62 billion WLFI tokens across a four to five-year period continues to draw criticism on X.
World Liberty Financial's native cryptocurrency, which has connections to the Trump family, experienced a steep decline of nearly 14% on Wednesday as a divisive governance measure proposing multiyear vesting schedules for over 62 billion WLFI tokens entered the community voting phase.
The governance measure was initially introduced to the World Liberty governance community on April 15 and became available for voting on Wednesday. The plan calls for more than 62 billion WLFI tokens currently owned by insiders and early investors to be locked for a two-year period, followed by a gradual release spanning two to three years.
The voting period extends until May 7. As of this writing, the proposal has garnered support from 99.95% of participating voters, and the necessary quorum threshold of 1 billion WLFI tokens has been achieved, with approximately 6 billion tokens voting in support compared to just 3.2 million voting against.
This is one of the most significant governance proposals in WLFI history. 62,282,252,205 locked WLFI tokens [are] subject to this proposal. None of it touches the market for a minimum of 2 years if passed.
World Liberty Financial
Even with close to unanimous support from voting participants, the measure has encountered significant pushback from certain community members.
As previously covered by Cointelegraph, prominent figures including Simon Dedic, the founder of Moonrock Capital, drew parallels between the proposal and a rug pull scheme, raising concerns about the two-year unlock timeline aligning with the duration of Donald Trump's remaining presidential term. Justin Sun, the founder of Tron and a major WLFI holder, also characterized the proposal as among the "most absurd" he's encountered.
Within the comment section of World Liberty's most recent X post declaring the voting period had commenced, the bulk of responses expressed disapproval of the proposal.
For early investors, the proposed unlocking timeline includes a two-year cliff period followed by a two-year linear vesting schedule, whereas insiders including founders, team members and advisers would face a two-year cliff with a three-year linear vesting period.
The duration of the suggested timeline has drawn significant criticism, and the voting mechanism itself has come under fire due to the fact that tokens belonging to non-voters will remain locked indefinitely.
According to the World Liberty Financial team, this framework was intentionally designed to provide a "more clear, bounded picture of governance preferences" and to ensure tokens remain with participants who demonstrate "genuine commitment" to the project's long-term success.
Data from CoinGecko shows that WLFI was trading at $0.06367 as of this writing, representing a 13.6% decrease over the preceding 24-hour period. Since its initial market debut, the token has fallen 72.8% in total value.
Cointelegraph has contacted World Liberty Financial seeking additional comment.