World Liberty Financial unveils 62B token release strategy featuring extended vesting and burn mechanism
Trump-associated DeFi project introduces comprehensive plan with extended lockup periods and voluntary token burning mechanism following community backlash over restricted token access.
On Wednesday, World Liberty Financial, a decentralized finance (DeFi) platform, published a governance proposal designed to subject 62.28 billion locked WLFI tokens to fresh multiyear vesting arrangements while introducing an optional burn mechanism affecting allocations designated for founders, team members, advisers and partners.
According to the proposal's terms, tokens locked for early supporters would be subject to a two-year cliff period, subsequently followed by a two-year linear vesting schedule. Allocations earmarked for founders, team members, advisers and partners would encounter a two-year cliff period before entering a three-year linear vesting phase, contingent upon those token holders voluntarily accepting the revised terms.
Additionally, the proposal includes provisions for burning as many as 4.52 billion WLFI tokens, representing 10% of the total allocation designated for founders, team members, advisers and partners. Token holders who decline to accept the revised vesting arrangements would see their holdings remain locked without any defined release timeline.
This initiative represents the formalization of a gradual unlocking strategy that the project had previously indicated, establishing a systematic token release mechanism while preventing any immediate expansion of circulating supply. The announcement arrives amid mounting pressure directed at the Trump-associated platform from token holders alongside intensifying examination of its governance practices.
WLFI proposal follows backlash, governance scrutiny
The introduction of this proposal arrives following escalating criticism directed at the platform from early WLFI purchasers who have expressed frustration regarding extended lockup durations and inadequate liquidity options. The project announced on April 10 that it would move forward with introducing the proposal in response to some token holders who had issued threats of pursuing legal remedies.
Further examination has emerged concerning the platform's governance framework and the processes employed for making critical decisions.
Justin Sun, the founder of Tron who had previously committed $30 million in investment to WLFI, publicly criticized the platform on Monday regarding transparency issues, making allegations that previous governance voting procedures were controlled by a limited number of wallet addresses and suffered from insufficient meaningful community engagement. World Liberty Financial responded to Sun's allegations by threatening to pursue legal action against him.
During that same day, Sun called upon WLFI to reveal the identities of entities controlling critical wallet addresses connected to its smart contract infrastructure, issuing a warning that the current configuration could enable substantial centralized control, potentially including the capability to freeze token holdings.
The proposal's release also comes in the wake of recent controversies surrounding WLFI's treasury operations and market valuation performance. WLFI experienced a decline to an unprecedented all-time low on Saturday, occurring merely days following reports that wallet addresses associated with the project had utilized billions of tokens as collateral for borrowing approximately $75 million worth of stablecoins.