World Liberty Financial faces criticism after a governance vote approved allocating up to 5% of unlocked treasury tokens to support its USD1 stablecoin, despite 80% of investor tokens remaining locked.
The Trump family-backed decentralized finance project proposed deploying treasury funds for USD1 incentive programs and strategic partnerships in late December.
Initial voting data showed approximately 67% opposition to the measure, though the proposal remained active through its January 4 deadline.
Token holders expressed frustration that they could not vote on unlocking their own holdings while the team advanced proposals benefiting USD1 growth.
What Happened
The governance proposal sought to utilize less than 5% of unlocked WLFI treasury holdings worth approximately $120 million for USD1 adoption programs.
World Liberty Financial sold $550 million in tokens to the public through March, with buyers receiving locked tokens at prices between $0.015 and $0.05.
The project unlocked 20% of sold tokens in September, allowing partial cash-outs, while the remaining 80% remain locked indefinitely.
Since the partial unlock, WLFI has declined approximately 60% from its all-time high, eroding paper gains for locked holders.
Token holders cannot create their own governance proposals under the current system, leading to complaints that the team prioritized USD1 growth over addressing token unlock schedules.
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Why It Matters
The revenue structure allocates 75% of net protocol income to entities linked to the Trump family and 25% to Witkoff family-associated entities, according to project documentation.
President Donald Trump owns 70% of DT Marks DEFI LLC, which receives the majority share of WLFI token sale proceeds and USD1 stablecoin interest.
World Liberty Financial applied for a U.S. national trust banking charter this month to bring USD1 issuance and custody under regulated operations.
The project also launched World Liberty Markets, an onchain lending and borrowing platform built around USD1 and the WLFI governance token.
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