TL;DR
- WLFI approved a proposal to use less than 5% of its unlocked treasury to support USD1; the vote closed with 77.75% in favor.
- On-chain data showed that the nine highest-weight wallets concentrated close to 59% of the voting power, while the single largest wallet represented 18.786% of the total.
- The dispute centered on governance: a significant portion of holders had their WLFI locked and were unable to vote, while wallets linked to the team and partners were able to participate.
World Liberty Financial (WLFI) approved a growth proposal for USD1 through an on-chain governance vote that triggered pushback within its community due to the concentration of voting power and participation restrictions affecting a significant portion of holders of its native token.
On-chain data shows that the nine largest wallets backing the proposal concentrated close to 59% of the effective voting power. Overall support reached 77.75% of the votes cast. The single largest wallet accounted for 18.786% of the total recorded in the snapshot used for the vote.
WLFI Governance Debate
The proposal authorized World Liberty Financial to deploy less than 5% of its unlocked WLFI treasury to support the adoption of USD1, the project’s dollar-backed stablecoin. The vote was created on December 28 and closed on January 4. A total of 2,931 addresses participated, with 3.3 billion votes in favor and 944.3 million against. Abstentions were marginal, and quorum reached 426%, well above the protocol’s required minimum.
The focus of the dispute was not the parameters of the proposal but governance. A significant portion of WLFI holders have kept their tokens locked since the token generation event and cannot participate in votes until unlock conditions are changed. In parallel, analysis shared by researcher DeFi^2 identified that several of the highest-weight wallets are linked to the project team or strategic partners, according to on-chain mapping tools.
Conflicts Over Revenue Distribution and Incentives
There were also questions about the token’s economic incentives. The project’s official documentation states that WLFI holders are not entitled to protocol revenue. The distribution framework allocates 75% of revenue to the Trump family and 25% to the Witkoff family. In that context, some holders pointed out that using WLFI to incentivize USD1 growth increases the circulating supply without a direct return mechanism.
Tensions increased after an on-chain transfer of 500 million WLFI to Jump Trading was detected shortly after the vote closed, while tokens allocated to early investors remain locked. On social media, calls grew to release the remaining 80% of those allocations.
On January 8, World Liberty Trust filed an application for a U.S. national banking charter with the Office of the Comptroller of the Currency. If approved, it would allow the issuance and custody of USD1 within the U.S. banking system. On January 12, the company announced the launch of World Liberty Markets, a lending and borrowing platform built around USD1 and WLFI
