The crypto initiative World Liberty Financial, backed by US President Donald Trump, has successfully passed a governance proposal aimed at reducing the supply and enhancing the value of its native cryptocurrency, following disappointing performance since its launch.
On Thursday, the platform, supported by the Trump family, saw a governance vote pass that allocates 100% of the liquidity fees from the project’s treasury for WLFI token buybacks and burns, effectively removing these tokens permanently from circulation.
The vote achieved a 99.8% majority, with only 0.06% opposing the proposal, which will act as the “foundation” for the platform’s token buyback strategy, according to information from WorldLibertyFinancial.com.
Such mechanisms aim to decrease the circulating supply of a token while increasing demand through buybacks.
“This program removes tokens from circulation held by participants not dedicated to WLFI’s long-term growth and direction, thereby increasing the relative weight for committed long-term holders,” the governance proposal outlined.
Post-proposal, WLFI will consolidate its liquidity positions across Ethereum, BNB Chain, and Solana, which will be utilized for buying back WLFI tokens on the open market. The tokens acquired will be sent to a burn address for permanent deletion from circulation.
Nonetheless, the proposal currently lacks estimates regarding the fees generated by the platform, making it challenging to gauge the potential market impact of the buybacks.
The governance vote was conducted nearly three weeks after the WLFI token’s official launch on September 1, which saw a 40% price drop within the first three days, resulting in millions of dollars in losses for large investors, as reported by Cointelegraph on September 4.
This decline occurred even after the WLFI platform burned 47 million tokens on September 3, a move that failed to stop the token’s post-launch downward trend.
The WLFI token has plummeted over 28% since its inception and was trading at $0.2223 at the time of this report, according to CoinMarketCap data.
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WLFI to explore additional protocol revenue sources for token buybacks
This governance proposal sets the groundwork for the project’s ongoing buyback strategy.
WLFI will also seek additional sources of protocol revenue to enhance the scale of WLFI buybacks and token burns.
Cointelegraph reached out to WLFI for more information regarding the additional protocol revenue sources and the possible scale of the initial token buyback, but no response was received prior to publication.
Related: Trump-linked WLFI’s 40% decline causes millions in losses for crypto whales: Finance Redefined
Among the investors who suffered losses on the WLFI token was former kickboxing champion and controversial figure Andrew Tate, who incurred a $67,000 loss on his WLFI long position on the decentralized exchange Hyperliquid, pushing his total losses to nearly $700,000 in his account, as reported by Cointelegraph on September 2.
Despite this, the crypto venture has been lucrative for the Trump family, with their collective wealth reportedly increasing by $1.3 billion in the week leading up to September 7, aided by the trading debut of mining firm American Bitcoin (ABTC) and profits from the WLFI platform.
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