World Liberty Financial (WLFI) has unveiled a new tokenomics proposal amid market turbulence: a buyback-and-burn program funded exclusively by fees generated from protocol-owned liquidity pools across Ethereum, Binance Smart Chain, and Solana. The initiative aims to bolster confidence after WLFI’s trading debut saw the token plunge 24% on-day, denting its market cap and raising concerns over oversupply.
According to the official governance proposal released on Sept. 2, all fees accrued from WLFI’s native liquidity positions—excluding third-party or community-provided pools—would be allocated to repurchasing WLFI on secondary markets before sending tokens to a verified burn address. This 100% burn allocation stands in contrast to alternative community proposals suggesting a split between staking and burns; the governance team argues full burns maximize deflationary impact and align long-term holder interests with protocol growth.
At launch, WLFI commanded a fleeting multi-billion-dollar valuation across major exchanges, including Binance, OKX, Coinbase, and Upbit. However, heightened selling pressure and hacking incidents targeting WLFI holders have exacerbated bearish sentiment. On-chain data from CoinGecko and Arkham reveal that despite initial hype, trading activity has lagged expectations, prompting the project team to adopt aggressive measures to tighten supply. Tron founder Justin Sun has publicly endorsed the proposal, pledging not to liquidate his unlocked WLFI holdings, which currently total roughly $693 million under vesting arrangements.
If implemented, the buyback-and-burn program could gradually erode circulating supply, potentially creating upward price pressure as fees accumulate. Critics caution that reliance on protocol-generated fees may limit the program’s scale unless trading volumes increase substantially. Meanwhile, WLFI’s community continues to debate broader governance reforms, including auto-staking mechanisms and treasury fund allocations. The outcome of these discussions will shape WLFI’s trajectory as a politically affiliated DeFi project navigating both market skepticism and technical challenges.
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