World Liberty signals phased WLFI unlock vote after early holder backlash

World Liberty said its WLFI unlock proposal will go through community input before a formal vote, outlining a phased vesting plan rather than a full token release.

Decentralized finance (DeFi) platform World Liberty Financial said Friday it plans to put forward next week a governance proposal that would set a phased unlock schedule for WLFI tokens held by early retail purchasers.

The Trump family-linked DeFi platform said the proposal will be opened for community input before proceeding to a formal vote. According to the project, the vote will not cover a full, immediate unlock, but instead a structured, long-term vesting plan designed to release tokens in stages. 

WLFI tokens remain largely locked for early buyers, with transferability tied to governance-approved unlocks. Tokenomist data shows that about 24.67% of WLFI’s 100 billion token supply has been released, while roughly 75.33% remains locked or pending future unlock decisions.

The proposal could determine when early buyers can finally access liquidity in WLFI, whose use is largely limited to governance. It comes as some holders publicly push back against the prolonged lockups and threaten legal action.

The concerns add to earlier governance decisions around token restrictions. On March 16, WLFI token holders approved a proposal introducing a six-month lock-up rule for certain transfers, marking one of the first formal changes to the project’s transferability framework.

World Liberty’s early sale materials said WLFI tokens were non-transferable and could remain locked indefinitely, with any future unlock subject to a governance vote no earlier than 12 months after the token sale and with no guaranteed timeline.

That 12-month threshold has already passed, with WLFI’s public sale beginning around mid-October 2024, placing the current proposal roughly 18 months after the initial sale. The company raised at least $550 million from WLFI token sales across two funding rounds.

Some self-identified WLFI presale buyers have publicly complained that most of their holdings remain locked, even as parts of the broader token supply have become transferable. 

At least one self-identified buyer said they had filed legal notices and were pursuing claims in the United States and the Netherlands against World Liberty Financial and its backers. Cointelegraph could not independently verify that any lawsuit had been filed. 

Cointelegraph reached out to World Liberty Financial for comments, but had not received a response by publication. 

Related: WLFI proposes governance staking system and USD1 usage incentives

One community member said in an X post that the project’s borrowing activity raised concerns among token holders, questioning how treasury funds were being used. Onchain data shows that World Liberty Financial’s treasury borrowed roughly $75 million in stablecoins from Dolomite using WLFI as collateral.

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Source: CoinTelegraph