Trump family-backed World Liberty Financial offered to unlock 62.3 billion WLFI governance tokens on Tuesday, less than a week after CoinDesk reported the company used 5 billion of its own tokens as collateral on lending platform Dolomite to borrow $75 million in stablecoins.
WLFI’s token was originally sold as a governance token only, with no transferability and indefinite locks. A vesting schedule with a defined path to liquidity changes the economic profile of what holders have purchased.
The proposal would open up liquidity to insiders who previously had no exit, thereby 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 vest, retaining all tokens.
Founders, team members, advisors, and partners holding 45.2 billion WLFI would face a 2-year cliff and 3-year vest, but with 10% of their allocation, or approximately 4.5 billion tokens, burned immediately after passing. (Burning refers to the permanent removal of tokens from the supply, usually by sending them to an address that is not controlled by anyone.)
In practice, this means that insiders would give up 4.5 billion tokens in exchange for beginning to unlock 40.7 billion that were previously locked indefinitely with no vesting schedule. These tokens had no path to liquidity before this proposal.
WLFI included participation data from its previous six votes in Wednesday’s release, showing that even the most committed proposal – the vote to make the token tradable – attracted 11.1 billion votes from WLFI.
The quorum for this proposal is 1 billion, with a simple majority required for passage. At these thresholds, the proposal could pass with only a fraction of the founders and team distribution.
Holders who do not positively accept the new vesting conditions keep their tokens locked indefinitely and retain their governance voting rights.
The timing follows the events of last week.
CoinDesk reported on April 9 that WLFI 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 funneled to Coinbase Prime.
The WLFI token fell 12% to an all-time high the next day. Then Tron founder Justin Sun, once the project’s largest 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, down about 48% from the average price at which WLFI’s own treasury has made $65.6 million in open market redemptions over the past six months.
Voting on Wednesday’s proposal extends over a seven-day period.
