US President Donald Trump-backed crypto project World Liberty Financial passed a governance proposal to reduce the supply and boost the value of its native cryptocurrency following its disappointing price performance since launch.
On Thursday, the Trump family-backed platform passed a governance vote that seeks to use 100% of the project’s treasury’s liquidity fees for World Liberty Financial (WLFI) token buybacks and burns, meaning permanently removing the tokens from circulation.
The vote passed with a 99.8% majority, while only 0.06% of the community voted against the proposal, which will serve as the “foundation” of the platform’s token buyback strategy, according to data from WorldLibertyFinancial.com.
Similar mechanisms seek to reduce the circulating supply of a token and create more demand through buybacks.
“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,” the governance proposal stated.
After the proposal, WLFI will collect its liquidity positions on Ethereum, BNB Chain and Solana, which will be used to buy back WLFI tokens on the open market. Purchased tokens are sent to a burn address for permanent removal from circulation.
However, the proposal still lacks estimates on the amount of fees generated by the platform, making it difficult to estimate the potential market impact of the buybacks.
The governance vote was passed nearly three weeks after the official launch of the WLFI token on Sept. 1, which resulted in a 40% price decline within the first three days of its launch, causing millions of dollars of losses for whales, Cointelegraph reported on Sept. 4.
The decline occurred despite the WLFI platform burning 47 million tokens on Sept. 3, a move that could not halt the token’s post-launch decline.
WLFI/USD, all-time chart. Source: CoinMarketCapThe WLFI token is down over 28% since launch and traded at $0.2223 at the time of writing, CoinMarketCap data shows.
Related: Crypto in US 401(k) retirement plans may drive Bitcoin to $200K in 2025
WLFI to explore additional protocol revenue sources for token buybacks
The governance proposal marks the “foundation” of the project’s ongoing buyback strategy.
WLFI will also explore additional sources of protocol revenue to increase the scale of WLFI buybacks and burns.
Cointelegraph contacted WLFI to find out more about the additional protocol revenue sources and the potential magnitude of the first token buyback, but had not received a response by publication.
Related: Trump-linked WLFI’s 40% decline causes millions in losses for crypto whales: Finance Redefined
Former kickboxing champion and controversial influencer Andrew Tate was among the investors who took a loss on the WLFI token. Tate realized a $67,000 loss on his WLFI long position on decentralized exchange Hyperliquid, as his cumulative losses neared $700,000 on his account, Cointelegraph reported on Sept. 2.
Still, the crypto venture is proving lucrative for the Trump family, which saw its collective wealth increase by a reported $1.3 billion in the week leading up to Sept. 7, with the trading debut of mining company American Bitcoin (ABTC) and the gains from the WLFI platform.
Magazine: Trump’s crypto ventures raise conflict of interest, insider trading questions
Source: https://cointelegraph.com/news/trump-wlfi-passes-vote-token-buybacks-burns?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
