TLDR
- WLFI’s price dropped 30% post-launch, prompting a proposal to burn tokens using protocol fees.
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The buyback-and-burn program targets long-term holders by reducing token supply.
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WLFI has 27.3 billion tokens in circulation, with a total supply of 100 billion.
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A large token unlock raised the Trump family’s WLFI holdings to $5 billion.
World Liberty Financial’s (WLFI) token has seen a significant drop in value, falling by 30% since its launch. In response to this decline, the project’s team has proposed a buyback-and-burn program to address concerns over the token’s supply and scarcity.
The proposal suggests using 100% of the fees generated from protocol-owned liquidity positions across Ethereum, BNB Chain, and Solana to repurchase WLFI tokens from the open market. These tokens would then be burned, permanently removing them from circulation.
By reducing the token supply, the initiative aims to increase the relative value of WLFI tokens for committed long-term holders. The goal is to create a direct connection between platform usage and token scarcity, potentially boosting the token’s price over time.
Burning Strategy Designed to Increase Scarcity
According to the proposal, the buyback-and-burn strategy would apply only to liquidity fees generated by WLFI’s own liquidity. Fees from third-party or community liquidity providers would not be included in the burn mechanism.
“This program removes tokens from circulation held by participants not committed to WLFI’s long-term growth and direction,” the team explained. The move is seen as a way to shift the supply-demand balance and increase the value of the remaining tokens held by long-term investors.
The WLFI team also considered alternative strategies, such as splitting the fees between the burn and treasury, but ultimately decided to go all-in on token burning. The aim is to maximize the deflationary effect and create a sense of scarcity around the token.
WLFI Faces Market Challenges Post-Launch
WLFI, which launched with great anticipation, initially traded at $0.32 before experiencing a sharp decline in price, falling by 34% to a low of $0.21. As of now, it is trading around $0.23. The token’s market capitalization stands at approximately $6.6 billion, with 27.3 billion WLFI tokens in circulation, out of a total supply of 100 billion.
Despite the initial volatility, WLFI’s pre-sale investors are still in profit, having purchased the tokens at a much lower price of $0.015 each. The project, which is backed by the Trump family, has faced both positive and critical feedback in its early stages.
In a related development, a significant unlock event added 24.6 billion WLFI tokens to circulation, increasing the Trump family’s holdings to $5 billion. This event has drawn attention to the project’s tokenomics and governance structure.
Community Support and Future Proposals
The community’s reaction to the token burning proposal has been largely positive, with many participants supporting the idea of using liquidity fees to buy back and burn WLFI tokens. The governance model allows the community to vote on key proposals, and this buyback strategy is currently one of the most discussed initiatives.
However, the proposal has raised some concerns, including uncertainties over the actual fee amounts and how the burn program will impact the token’s supply. There are also questions about what would happen if the protocol needs emergency funds, given the decision to allocate 100% of the fees to token burning.
Another governance proposal suggests auto-staking locked tokens to reduce selling pressure, but this has not received as much support as the burn plan.
