World Liberty Financial (WLFI), a decentralized finance (DeFi) project associated with former President Donald Trump, is currently facing a crisis as its token has experienced a significant drop in value, losing over 50% in September. The project has taken swift action to address this issue by implementing a buyback-and-burn program aimed at stabilizing the market.
In a recent governance post, WLFI announced that it would be using all treasury liquidity fees to absorb selling pressure and initiate token buybacks. The community has overwhelmingly supported this plan, with WLFI committing to full transparency by providing detailed reports of every burn conducted.
The urgency of this move is evident in WLFI’s recent losses. The token is currently trading at $0.19, down from its peak of $0.46 on September 1, representing a 58% decline in less than a month. Weekly losses are at 12.85%, with a 15.45% decline for the month.
This is not the first time WLFI has intervened to address market volatility. Shortly after its launch, the project burned 47 million tokens on September 3 to counter a 31% sell-off, demonstrating its commitment to managing price fluctuations.
The buyback-and-burn program implemented by WLFI is not only a response to the current market conditions but also a strategic move to align token scarcity with platform growth. By using fees generated from its protocol-owned liquidity pools on various chains, WLFI aims to reduce token supply, increase scarcity, and enhance token value as trading activity grows.
The project’s decision to adopt this model places it among other DeFi protocols that have successfully leveraged similar strategies to strengthen their tokens. Hyperliquid, Jupiter, and Sky are examples of projects that have implemented buyback programs to drive sustained demand, increase scarcity, and reinforce governance influence.
Furthermore, the trend of buybacks is not limited to the crypto space. Listed companies with crypto treasuries are also turning to share repurchase programs to support falling stock prices. Thumzup Media, a digital advertising company with a growing Web3 presence, recently launched a $10 million share repurchase plan to boost investor confidence.
In a similar vein, DeFi Development Corp, a public company built around a Solana-based treasury strategy, has expanded its buyback program to $100 million, signaling a strong commitment to stabilizing value and instilling confidence in its token.
Overall, buyback programs, whether in the crypto or traditional equity space, are emerging as a critical mechanism for managing market volatility and demonstrating stability. WLFI’s buyback-and-burn initiative is a testament to the project’s resilience and determination to navigate challenging market conditions.