WLFI seeks to restructure locked tokens after investor backlash

World Liberty Financial (WLFI), a digital asset venture backed by the Trump family, has proposed a major overhaul of its token structure as it faces increased scrutiny over recent financial activity and investor concerns.

Token overhaul proposal

According to Reuters, WLFI’s plan, released on April 15, is designed to address what the project calls a “governance overhang,” where large token holdings are locked and inactive, limiting voting participation.

Under the proposal:

• Founders and team members hold about 45.2 billion tokens. They would need to burn 10%—roughly 4.5 billion tokens—to opt in.
• The remaining tokens would unlock over five years, with a two-year cliff. After the cliff, tokens would unlock monthly.
• Early supporters hold about 17 billion tokens. They would not face a burn and instead would move to a four-year vesting schedule with the same two-year cliff.
• Token holders must actively accept the new terms. If they do nothing, their tokens would remain locked indefinitely.

Voting requirements and timing

The vote is set to last seven days. It requires a 1 billion token quorum and a simple majority. If the proposal is approved, the token burn would occur immediately.

Loan controversy and governance concerns

Earlier this month, WLFI deposited 5 billion tokens into Dolomite, where they were used as collateral. The project then borrowed about $75 million in stablecoins, with some of the funds reportedly sent to Coinbase Prime.

Criticism followed after the activity, including backlash from investors who said they were told the tokens were non-transferable. Retail holders remained locked while the treasury accessed liquidity.

Observers also pointed to links between WLFI and Dolomite. One of Dolomite’s co-founders is also an advisor to WLFI, raising questions about insider access.

Market reaction and legal pressure

The market response was swift. The WLFI token fell about 12% after the reports, dropping to around $0.079, a record low. The level was described as far below previous buyback prices, adding to investor concerns about valuation and liquidity.

Legal pressure is also increasing. Early investors in the U.S. and the Netherlands have issued notices, claiming they were misled about lockups and liquidity.

What the proposal could change

WLFI’s new plan appears aimed at restoring confidence by introducing clearer timelines and reducing supply through the proposed burn. However, it also places conditions on holders: investors must accept the new terms to gain future liquidity, while those who do not would keep their tokens locked.

The result of the vote will be closely watched as an indicator of whether the community supports the proposed direction.