World Liberty Financial, backed by the Trump family, proposed unlocking 62.3 billion WLFI governance tokens on Tuesday, less than a week after CoinDesk reported that the company had used 5 billion of its own tokens as collateral on lending platform Dolomite to borrow $75 million in stablecoins.
The WLFI token was originally sold as a governance-only token, with no transferability and indefinite locks. A vesting schedule with a defined path to liquidity changes the economic profile of what holders purchased.
The proposal would open liquidity for insiders who previously had no outlet, changing the economics of the token.
The proposal divides the blocked supply into two groups. Early supporters holding 17 billion WLFI would receive a 2-year cliff followed by a 2-year linear vesting, retaining all tokens.
Founders, team members, advisors and partners holding 45.2 billion WLFI would face a 2-year cliff and a 3-year vesting, but with 10% of their allocation, approximately 4.5 billion tokens, burned immediately upon approval. (Burns refer to permanently removing tokens from the supply, usually by sending them to an address that is not controlled by anyone.)
In practice, it means that insiders would hand over 4.5 billion tokens in exchange for starting to unlock 40.7 billion that were previously locked indefinitely without any vesting schedule attached. Those tokens had no path to liquidity before this proposal.
WLFI included participation data from its six previous votes in Wednesday’s post, showing that even the most committed proposal – the vote to make the token tradable – attracted 11.1 billion WLFI in voting power.
The quorum for this proposal is one billion and a simple majority is required to approve it. At those thresholds, the proposal could be approved with only a fraction of the founders’ and team’s allocation.
Holders who do not affirmatively accept the new vesting terms keep their tokens locked indefinitely and retain governance voting rights.
The moment comes after the events of last week.
CoinDesk reported on April 9 that WLFI had deposited 5 billion of its own governance tokens into Dolomite, a lending protocol whose co-founder advises WLFI, and borrowed $75 million in stablecoins that were partially routed to Coinbase Prime.
The WLFI token fell 12% to an all-time low the next day. Then Tron founder Justin Sun, once the project’s biggest backer, publicly accused the team of treating users like “personal ATMs,” prompting WLFI to threaten legal action.
The token was trading near $0.079 on Tuesday, about 48% lower than the average price at which WLFI’s own treasury made $65.6 million in open market buybacks over the past six months.
The vote on Wednesday’s proposal will last seven days.
