World Liberty Financial recently unveiled a groundbreaking proposal that could potentially change the trajectory of its native token, WLFI. The proposal suggests redirecting all fees generated from the protocol-owned liquidity towards open-market buybacks and permanent token burns. This move is aimed at restoring investor confidence in the wake of a tumultuous launch that saw the token’s price experience significant volatility.
The proposal, which was submitted on September 12, focuses on liquidity pools directly controlled by WLFI on Ethereum, BNB Chain, and Solana. Fees from community or third-party liquidity providers will remain unaffected by this new initiative. The plan entails using trading fees from these liquidity pools to fund an automated buyback and burn process. This process would lead to a reduction in the total supply of WLFI tokens, as purchased tokens are sent to a burn address. All transactions would be recorded on-chain to ensure transparency.
The rationale behind this strategy is to align the token’s value more closely with protocol usage, decrease the circulating supply with each trade, and increase the influence of long-term holders. The team behind the project considered various alternatives, such as retaining fees in the Treasury or splitting proceeds between operations and burns. However, community feedback overwhelmingly favored a full burn strategy as the most transparent and effective way to regain momentum.
Tokenholders are currently voting on whether to approve the proposal, with a deadline set for September 18. Initial indications suggest strong community support, with 99% of voters in favor of the plan.
The unveiling of this proposal comes at a critical juncture for WLFI, as the token experienced a rollercoaster ride following its launch on major exchanges like Binance, Coinbase, and Upbit. After an initial high of $0.46, the token quickly plummeted to lows near $0.21, leaving early investors in a precarious position. Despite a token burn of 47 million tokens in an attempt to stabilize prices, the value failed to rebound significantly, hovering around $0.201.
The project faced criticism for allegedly favoring insiders, such as the Trump family, whose significant stake in the token led to a substantial increase in their net worth on launch day. This raised concerns about fairness and transparency, with retail traders bearing the brunt of the market volatility.
The introduction of the buyback-and-burn program is seen as a step towards addressing these concerns and reestablishing trust in the market. However, analysts caution that challenges lie ahead, particularly regarding future token unlocks that could counteract the deflationary impact of burns. It remains to be seen whether supply reduction alone can stabilize demand without a clear contingency plan in place.
As the community awaits the outcome of the vote on the proposal, all eyes are on World Liberty Financial to see if this innovative approach will pave the way for a more sustainable and resilient future for the WLFI token.