WLFI proposes 4.5 billion token burn as governance concerns and user backlash grow

World Liberty Financial [WLFI] has introduced a governance proposal to restructure its tokenomics, impacting over 62.2 billion WLFI tokens through new vesting schedules and a potential token burn.

The move comes amid rising scrutiny around the project’s risk exposure, a public dispute with Justin Sun, and growing user dissatisfaction over governance and token access.

Proposal outlines burn and extended vesting terms

According to the proposal, 62.3 billion WLFI tokens—covering early supporters and team-related allocations—will be subject to revised lock-up conditions. Up to 10% of tokens held by founders, team members, advisors, and partners, or roughly 4.5 billion WLFI, will be permanently burned if participants opt into the new terms.

Early supporters holding over 17 billion tokens would transition to a two-year cliff, followed by a two-year linear vesting period. Meanwhile, team and partner allocations would face a longer schedule, with a two-year cliff and three-year vesting timeline.

The proposal also introduces an opt-in mechanism. Holders who do not accept the updated terms will have their tokens remain locked indefinitely, while retaining governance rights.

Scrutiny builds over risk exposure and governance claims

The proposal follows recent concerns over WLFI’s financial activity. On-chain data showed the project had used up to 5 billion WLFI tokens as collateral to borrow more than $75 million in USDC, raising liquidity concerns among market participants.

At the same time, Sun alleged that WLFI embedded undisclosed blacklisting functions in its token contracts, enabling the team to freeze user funds and restrict participation. He also questioned the transparency of the project’s governance process.

WLFI denied the claims, calling them baseless and accusing Sun of misconduct, adding that it was prepared to defend its position in court.

Users push back on lock-ups and participation limits

Some community members have criticised the proposal’s extended vesting timelines, arguing that it delays access to funds for early supporters. 

Others claimed that frozen wallets have prevented them from participating in governance, raising questions about the fairness of the proposed voting process.

These concerns echo broader unease about governance participation, with WLFI noting that a large portion of locked tokens has historically remained inactive in voting.

Final Summary

• WLFI is proposing a major token restructuring, including a potential 4.5 billion token burn and new vesting schedules affecting over 62 billion tokens.
• The changes come amid governance disputes, financial scrutiny, and user backlash, placing the project’s credibility and future token supply under closer watch.