The crypto initiative World Liberty Financial, backed by US President Donald Trump, has successfully passed a governance proposal aimed at decreasing the supply and enhancing the value of its native cryptocurrency due to lackluster price performance since its inception.
On Thursday, the platform, which is supported by the Trump family, achieved a governance vote outcome that plans to allocate 100% of its treasury’s liquidity fees for the buybacks and burns of the World Liberty Financial (WLFI) token, effectively removing these tokens from circulation permanently.
The proposal was approved with a 99.8% majority, while only 0.06% of community members opposed it. This decision is intended to lay the “foundation” for the platform’s token buyback strategy, as per data from WorldLibertyFinancial.com.
Such mechanisms aim to reduce the circulating supply of tokens while increasing demand through buybacks.
According to the governance proposal, “This program removes tokens from circulation held by participants not committed to WLFI’s long-term growth and direction, effectively increasing relative weight for committed long-term holders.”
Post-proposal, WLFI will consolidate its liquidity positions on Ethereum, BNB Chain, and Solana, which will facilitate the buyback of WLFI tokens in the open market. Acquired tokens will be directed to a burn address for permanent removal from circulation.
Nonetheless, the proposal lacks estimates regarding the fees generated by the platform, complicating the task of predicting the market impact of the buybacks.
The governance vote took place nearly three weeks after the WLFI token’s official launch on Sept. 1, which saw a price drop of 40% within the first three days, resulting in millions in losses for major investors, as reported by Cointelegraph on Sept. 4.
This decline occurred despite the WLFI platform burning 47 million tokens on Sept. 3, an action that could not halt the token’s decline after launch.
Since its launch, the WLFI token has experienced a decline of over 28%, trading at $0.2223 at the time of this writing, according to CoinMarketCap.
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WLFI exploring additional protocol revenue sources for token buybacks
The governance proposal signifies the “foundation” of the project’s ongoing buyback strategy.
WLFI is also set to investigate additional sources of protocol revenue to amplify the volume of WLFI buybacks and burns.
Cointelegraph reached out to WLFI for further information regarding the additional protocol revenue sources and the potential scale of the initial token buyback but did not receive a response by publication.
Related: Trump-linked WLFI’s 40% decline causes millions in losses for crypto whales: Finance Redefined
Andrew Tate, the former kickboxing champion and controversial influencer, was one of the investors who incurred a loss on the WLFI token. Tate experienced a $67,000 loss on his WLFI long position on decentralized exchange Hyperliquid, contributing to cumulative losses nearing $700,000 on his account, as reported by Cointelegraph on Sept. 2.
Despite this, the crypto venture has proven fruitful for the Trump family, who reportedly saw a $1.3 billion rise in their collective wealth during the week leading up to Sept. 7, aided by the trading debut of mining company American Bitcoin (ABTC) and gains from the WLFI platform.
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