The cryptocurrency project World Liberty Financial, supported by US President Donald Trump, has successfully passed a governance proposal aimed at reducing the supply and enhancing the value of its native cryptocurrency due to underwhelming price performance since its launch.
On Thursday, the Trump family-affiliated platform achieved a governance vote approving the use of all liquidity fees from the project’s treasury for World Liberty Financial (WLFI) token buybacks and burns, which effectively removes tokens from circulation permanently.
The proposal was approved with a 99.8% majority, while only 0.06% of the community opposed it. This initiative is intended to be the foundation of 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 vision, thereby increasing the relative weight for those committed to long-term holding,” stated the governance proposal.
Post-proposal, WLFI will consolidate its liquidity positions on Ethereum, BNB Chain, and Solana, which will be used to repurchase WLFI tokens on the open market. Acquired tokens will be sent to a burn address for permanent elimination from circulation.
However, the proposal currently lacks estimates on the fees generated by the platform, making it challenging to assess the potential market impact of the buybacks.
The governance vote passed almost three weeks following the official launch of the WLFI token on September 1, which led to a 40% price decline within the first three days, resulting in significant losses for major investors, as reported by Cointelegraph on September 4.
This decline occurred despite the WLFI platform burning 47 million tokens on September 3, a measure that failed to reverse the post-launch downturn.
The WLFI token has dropped over 28% since its launch, trading at $0.2223 at the time of this writing, according to CoinMarketCap data.
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WLFI to seek additional protocol revenue sources for token buybacks
The governance proposal establishes a foundation for the project’s ongoing buyback strategy.
WLFI will also investigate other potential sources of protocol revenue to scale up WLFI buybacks and burns.
Cointelegraph reached out to WLFI for more information on additional protocol revenue sources and the estimated impact of the initial token buyback, but had not received a reply by the time of publication.
Related: Trump-linked WLFI’s 40% decline causes millions in losses for crypto whales: Finance Redefined
Andrew Tate, a former kickboxing champion and controversial influencer, was among the investors who reported a loss on the WLFI token. Tate incurred a $67,000 loss on his WLFI long position on the decentralized exchange Hyperliquid, with total losses nearing $700,000 on his account, as Cointelegraph noted on September 2.
Despite this, the crypto venture has proven profitable for the Trump family, which reportedly saw its combined wealth rise by $1.3 billion in the week leading up to September 7, alongside the trading debut of the mining company American Bitcoin (ABTC) and the gains recorded from the WLFI platform.
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