Donald Trump-backed crypto project World Liberty Financial (WLFI) has approved a governance proposal aimed at reducing the supply of its native token and potentially boosting its value, following lackluster performance since its launch.
On Thursday, the platform passed a vote to allocate 100% of its treasury’s liquidity fees toward WLFI token buybacks and burns, permanently removing the tokens from circulation.
The proposal received overwhelming support, with 99.8% of participants voting in favor and just 0.06% against. According to WorldLibertyFinancial.com, this initiative will form the “foundation” of the platform’s token buyback strategy.
Buyback and burn programs are commonly used in crypto to lower circulating supply and increase demand.
“This program removes tokens from circulation held by participants not committed to WLFI’s long-term growth, effectively increasing the relative stake of committed long-term holders,” the governance proposal explained.
Following the proposal, WLFI will gather its liquidity positions across Ethereum, BNB Chain, and Solana to fund buybacks of WLFI tokens on the open market. The purchased tokens will then be sent to a burn address, permanently removing them from circulation.
However, the proposal does not provide estimates of the platform’s fee generation, making it difficult to gauge the potential market impact of the buybacks.
The governance vote comes nearly three weeks after the WLFI token’s official launch on Sept. 1, which saw a 40% price drop within its first three days, resulting in millions of dollars in losses for major holders, according to a Sept. 4 report.
The decline followed a token burn of 47 million WLFI on Sept. 3, which failed to halt the token’s post-launch slide.
The WLFI token has fallen more than 28% since its launch, trading at $0.2223 at the time of writing, according to CoinMarketCap data.
The recent governance proposal lays the “foundation” for the project’s ongoing buyback strategy. WLFI also plans to explore additional protocol revenue streams to expand the scale of future token buybacks and burns.
Among the investors affected was former kickboxing champion and controversial influencer Andrew Tate, who reportedly took a $67,000 loss on his WLFI long position on the decentralized exchange Hyperliquid. His cumulative losses on the platform have approached $700,000, according to Cointelegraph’s Sept. 2 report.
Meanwhile, the crypto venture appears profitable for the Trump family, whose collective wealth reportedly rose by $1.3 billion in the week leading up to Sept. 7, driven by the trading debut of mining company American Bitcoin (ABTC) and gains from the WLFI platform.
