Trump-Backed World Liberty Financial Proposes 62B WLFI Lock-Up Restructuring After Collateral Controversy

Trump-backed World Liberty Financial (WLFI) has released a proposal to lock up to 62 billion tokens for two years. with plans for a linear vesting after the lock-up period. This follows a controversy last week in which the team used up to 5 billion tokens as collateral on the DeFi platform Dolomite.

World Liberty Financial Proposes To Restructure WLFI Lock-Up

The Trump-backed project has released a proposal to restructure the lock-up period for up to 62 billion tokens. This includes 45.2 billion WLFI tokens belonging to founders, team members, advisors, and partners, which they propose to vest with a 2-year cliff and a 3-year linear vesting period upon opting in.

Furthermore, upon opting in, these tokens will be subject to a 10% burn. This means that up to 4.5 billion tokens will be subject to the burn, which will take effect the moment the proposal passes. This move comes amid the collateral controversy, with the World Liberty Financial team taking out a $75 million loan using nearly 5 billion of their tokens.

As part of the proposal, 17 billion WLFI tokens belonging to early supporters will also move to a 2-year cliff and then a 2-year linear vest. These tokens will not be subject to a mandatory burn, unlike the tokens belonging to founders. The team noted that these tokens could increase if holders with unclaimed prior allocations claim and enter the locked pool before this proposal takes effect.

If passed, this would mean that up to 62.3 billion WLFI tokens would remain committed to governance participation for at least two years. “Either way, the WLFI ecosystem’s commitment to long-term governance and market supply has never been more clear,” the team said

Token Price Jumps

The WLFI price sharply jumped from an intraday low below $0.08 following the release of the proposal to as high as $0.84. The token is currently trading at around $0.0809, up on the day, according to TradingView data.

As CoinGape reported, the World Liberty Financial token dumped by over 10% last week amid concerns about the team’s collateral. However, this latest proposal is expected to allay concerns and boost confidence in the Trump-backed project.

Voting for the proposal will run for 7 days, with a quorum requirement of 1 billion WLFI tokens. Meanwhile, the proposal simply needs a simple majority to pass, and for this lock-up period to go into effect.

The World Liberty Financial team announced that token holders who do not affirmatively accept the vesting schedule will have their tokens remain locked indefinitely. However, they will be able to use all their tokens to participate in governance decisions, subject to the terms of any future unlock proposals.