When a new cryptocurrency hits the market, its debut can often resemble a wild ride at the fair. Such was the case for World Liberty Financial’s native token, WLFI, which saw its price tumble after listing on major exchanges this week. To steady the ship and reassure rattled investors, the project, notably backed by the Trump family, quickly put forth a plan: a token buyback and burn program.
The WLFI token began trading on Monday across centralized exchanges like Binance, Upbit, and Kraken. It shot up to a peak of $0.33. However, gravity soon took hold. The token’s value then dropped over 20%, landing at $0.23 at the time of writing, according to CoinGecko data. This quick fall sent a ripple of concern through the community.
The proposal, unveiled on Monday, aims to fix this. It outlines that all fees generated from the protocol’s own liquidity pools on Ethereum, Binance Smart Chain, and Solana will be used. These fees will buy WLFI tokens directly from the open market. The purchased tokens will then be sent to a special “burn” address, removing them from circulation forever.
A Strategy for Scarcity
“This program removes tokens from circulation that are held by participants not committed to WLFI’s long-term growth,” the proposal states. “It effectively increases the relative weight of committed long-term holders.” The team clarified that this program only applies to fees from liquidity managed by the protocol. It leaves out liquidity providers from third parties or the community. They also promised full transparency. All burn transactions will be recorded on the blockchain and reported to the community.
“More trading activity will create more fees,” the team explained. “This will lead to more tokens being burned.” This strategy is designed to create scarcity. It aims to counter any feelings that there are too many tokens available. It also seeks to strengthen trust in the project’s future.
A Rocky Start for WLFI
The launch of WLFI generated a lot of buzz among investors. Futures markets initially valued the project at over $40 billion, CoinDesk reported. WLFI even reached a market capitalization of $9 billion. Its fully diluted valuation (FDV) hit $32 billion. This briefly made WLFI the 26th largest cryptocurrency in the world, based on CoinGecko’s figures.
But the early excitement quickly faded. Selling pressure pushed the token down by 34% within hours. It hit a low of $0.21 before settling around $0.22. Despite this drop, investors who bought the token in the presale at $0.015 are still sitting on substantial gains.
Since its debut, WLFI has seen over $2.5 billion in trading volume. Its current market capitalization is about $6 billion. Still, the token faces market headwinds. Some holders on community forums have voiced their doubts. Yet, the project has some big names in its corner. Justin Sun, founder of Tron, called it “one of the biggest and most important projects in crypto” on X. He also pledged not to sell his unlocked tokens. Arkham data shows Sun holds nearly $693 million in WLFI tokens. Many of these are tied to undisclosed vesting agreements.
Community Ideas and Trump Family Wealth
Beyond the official buyback and burn plan, the community offered another idea. One proposal suggested that 80% of WLFI tokens still locked should be automatically staked in pools. Rewards for these stakes would come from 20% of the community reserve. This idea, however, was criticized. Some saw it as merely moving money around rather than creating actual returns. It did not get the same support as the burn proposal.
The WLFI team looked at other options, such as splitting fees between the treasury and burning. But they decided against them. They chose to commit 100% of fees to burning to maximize its effect. If the proposal passes, WLFI plans to look at adding other revenue streams from the protocol. This would help expand the program later on.
World Liberty Financial, founded in 2024, gained significant attention. This was largely due to public support from former U.S. President Donald Trump and his children. Besides the WLFI token, the project also launched the USD1 stablecoin. USD1 is now the sixth-largest stablecoin, with a market capitalization of $2.6 billion. Despite initial challenges, the buyback and burn proposal aims to build investor confidence. The Trump family’s crypto fortune grew by about $5 billion this week following WLFI’s debut.