The crypto project World Liberty Financial, supported by US President Donald Trump, has successfully passed a governance proposal aimed at reducing its cryptocurrency supply and enhancing its value following underwhelming price performance after launch.
On Thursday, the platform, backed by the Trump family, received overwhelming approval for a governance vote that intends to allocate 100% of the liquidity fees from the project’s treasury to buybacks and burns of the World Liberty Financial (WLFI) token, effectively removing those tokens from circulation permanently.
This proposal received a 99.8% majority, with only 0.06% of the community opposing it. This will act as the foundational strategy for the platform’s token buyback initiative, according to WorldLibertyFinancial.com.
Such mechanisms are designed to decrease the circulating supply of a token and subsequently increase demand through buybacks.
The governance proposal articulated, “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.”
After the proposal, WLFI plans to gather its liquidity positions across Ethereum, BNB Chain, and Solana, which will then be utilized to repurchase WLFI tokens from the open market. Tokens acquired will be directed to a burn address for permanent removal from circulation.
However, the proposal lacks estimates on the fee generation by the platform, making it challenging to gauge the potential market impact of the buybacks.
The governance vote occurred nearly three weeks post WLFI token’s official launch on Sept. 1, which witnessed a drastic 40% price drop within the first three days, resulting in millions of dollars in losses for major investors, as reported by Cointelegraph on Sept. 4.
This decline transpired despite WLFI’s action of burning 47 million tokens on Sept. 3, an effort that could not prevent the token’s post-launch plummet.
Currently, the WLFI token has decreased over 28% since its launch, trading at $0.2223 at the time of writing, as per CoinMarketCap data.
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WLFI to explore additional protocol revenue sources for token buybacks
The governance proposal sets the “foundation” for the buyback strategy moving forward.
WLFI also aims to identify alternative sources of protocol revenue to enhance the scale of WLFI buybacks and burns.
Cointelegraph reached out to WLFI to gather more information regarding additional protocol revenue sources and the potential scale of the initial token buyback, but had not received a response 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 figure, was among the investors impacted by the WLFI token, realizing a loss of $67,000 on his WLFI long position on the decentralized exchange Hyperliquid, bringing his total losses close to $700,000, as reported by Cointelegraph on Sept. 2.
Regardless, the crypto endeavor has proven profitable for the Trump family, which reportedly saw its collective wealth rise by $1.3 billion in the week leading up to Sept. 7, thanks to the trading debut of mining firm American Bitcoin (ABTC) and profits from the WLFI platform.
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