Written by Brian Quarmby, Staff Writer. Reviewed by Felix Ng, Staff Editor. WLFI drops 14% as controversial token unlock goes to vote
The proposal to unlock more than 62 billion WLFI tokens over four to five years has 99.95% approval but is still facing backlash on X.
The native token of Trump-family-linked World Liberty Financial dropped nearly 14% on Wednesday as a controversial governance proposal that would place over 62 billion WLFI tokens under new multiyear vesting schedules went to a community vote.
The proposal was first submitted to the World Liberty governance community on April 15 and officially went live for voting on Wednesday. It proposes locking more than 62 billion WLFI tokens held by early investors and insiders for two years before gradually being released over a span of two to three years.
Voting runs until May 7. At the time of writing, 99.95% of votes are in favor of the proposal, and the quorum requirement of 1 billion WLFI tokens has already been met, with 6 billion tokens in favor and 3.2 million against.
“This is one of the most significant governance proposals in WLFI history,” World Liberty Financial said in an X post on Wednesday, adding: “62,282,252,205 locked WLFI tokens [are] subject to this proposal. None of it touches the market for a minimum of 2 years if passed.”
Despite nearly 100% of voting power being allocated to the “yes” vote, the proposal has been met with strong criticism from some members of the community.
Cointelegraph previously reported that figures such as Moonrock Capital founder Simon Dedic likened the proposal to a rug pull and questioned the two-year unlocks coinciding with the remainder of Donald Trump's term as US president. Tron founder Justin Sun, who holds a significant amount of WLFI, also labeled the proposal one of the “most absurd” he's ever seen.
In the replies to World Liberty's latest X post announcing that the vote had gone live, the majority of comments were critical of the proposal.
Source: World Liberty Financial
The unlocking schedule for early investors involves a two-year cliff followed by a two-year linear vest, while insiders such as founders, team members and advisers have a two-year cliff and three-year linear vest.
The proposed schedule has faced backlash for its length, while the voting process has also been criticized because those who don't vote will have their tokens locked up indefinitely.
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The World Liberty Financial team said this structure was designed to give a “more clear, bounded picture of governance preferences” and to keep tokens in the hands of those who are “genuinely committed” to the future of the project.
According to data from CoinGecko, WLFI was priced at $0.06367 at the time of writing, down 13.6% over the past 24 hours. Overall, it is down 72.8% since hitting the open market.
Cointelegraph has reached out to World Liberty Financial for comment.