TL;DR:
- WLFI dropped 9.4% in the last 24 hours and is down 23% on the week after the approval of a proposal to unlock 62 billion tokens.
- The proposal received 99.95% of votes in favor, though voting power is concentrated in just four wallets that control 40% of the total.
- The unlocked tokens won’t reach the market for at least two years, but figures like Simon Dedic and Justin Sun called the initiative a “rug pull.”
World Liberty Financial submitted to community vote a proposal to restructure the unlock schedule for 62.282 billion WLFI tokens held by early investors and insiders.
The initiative, originally presented on April 15, establishes that founders, team members and partners will burn 10% of their holdings, approximately 4.5 billion WLFI tokens, before releasing the remaining 40.7 billion under a five-year schedule with an initial waiting period of two years. No tokens would reach the market before that minimum timeframe.
The market responded with a sharp correction. According to CoinMarketCap data, WLFI is trading at $0.05984, down 9.4% over the last 24 hours. On a weekly basis, the accumulated loss amounts to 23%, while over the past month the decline is around 39%. Trading volume over the last 24 hours surged 87% and exceeds $144 million, a sign that the proposal caused enormous turmoil in the market.
Concentration of Power in WLFI and Criticism of the Project
Despite 99.95% of votes supporting the proposal and the quorum of 1 billion tokens having been widely surpassed, the governance of the project rests in few hands. The largest wallet represents nearly 13% of votes cast, and the top four control around 40% of the total voting power within WLFI, enough to determine the outcome in a practically unilateral manner.
The proposal also drew heavy criticism outside the voting process. Simon Dedic, founder of Moonrock Capital, compared it to a rug pull and questioned that the unlock period coincides with the remainder of Donald Trump’s term as President of the United States. Justin Sun, founder of Tron and a WLFI holder, described it as one of the “most absurd” proposals he has ever seen. Sun is also engaged in a legal dispute against the project over the alleged freezing of his tokens and the loss of his governance rights, accusations that World Liberty Financial has rejected.
The vote will remain open until May 7. The project’s team defended the proposed structure as a way to ensure tokens remain in the hands of those “genuinely committed” to the future of the protocol.
