World Liberty Financial’s native token, WLFI, experienced a significant drop of nearly 14% on Wednesday as the project opened voting on a controversial governance proposal to unlock over 62 billion tokens. This governance vote, first submitted on April 15, is set to determine the fate of these tokens, many of which have been in limbo since the project’s inception.
The proposed measure, which gained traction quickly, imposes a two-year cliff before the tokens enter circulation, followed by a multi-year vesting schedule. This means that even if the vote passes, those who are eligible would face a lengthy wait before being able to access their holdings. Despite garnering overwhelming support — 99.95% of votes cast are favorable, with 6 billion tokens voting yes against just 3.2 million opposing — the community sentiment on social media has been overwhelmingly critical.
At the time of writing, WLFI was trading at $0.064, down from $0.073 before the voting commenced, reflecting a notable decline since its all-time high of $0.33. Investors eagerly participated in the vote, which will remain open until May 7, and they have already achieved the necessary quorum of 1 billion tokens to move forward.
The proposal covers approximately 45 billion tokens allocated for founders, advisors, and early partnerships, which would also be subjected to a two-year cliff followed by a three-year linear vest. An additional 17 billion tokens earmarked for support from early protocol users will follow a similar unlocking schedule, returning to those stakeholders only after a two-year wait.
Community Backlash
Despite the proposal’s apparent popularity in voting terms, the backlash from the community is palpable, particularly on X. Many early investors, who have already been on a waiting list for more than a year for their allocations, have criticized the new vesting terms as misleading. “What’s this two-year cliff and two-year vesting nonsense?” questioned one disgruntled investor, expressing frustration over the lengthy timeline before they can access their tokens.
Notable figures in the crypto space, such as Moonrock Capital’s Simon Dedic, have voiced their concerns publicly, likening the situation to a rug pull and drawing parallels between the unlocking schedule and politically-charged timelines, suggesting ulterior motives.
Tron founder Justin Sun, one of WLFI’s largest investors, expressed his disdain for the governance proposal, labeling it amongst the “most absurd” he has encountered. The criticism is further compounded by Sun’s ongoing legal dispute with World Liberty, exacerbating tension as he seeks to assert control over his assets following a recent token freeze.
Token Burn Implications
If the governance proposal passes, roughly 10% of the tokens designated for the founding team and investors—approximately 4.5 billion tokens—could be burned permanently. This is part of a broader strategy articulated by World Liberty, aimed at replacing indefinite token locks with defined vesting schedules, thereby aligning token distribution with long-term commitment to the project.
In contrast, the firm noted that those who choose not to vote will have their tokens locked indefinitely, raising the stakes for holders to engage in the voting process. From an initial supply of 100 billion WLFI tokens, approximately 25 billion were sold in pre-sale rounds, with early investors still holding around 17 billion of these tokens, creating a significant interest in the outcome of this vote.
