Trump’s World Liberty Financial Burns 100 Million WLFI Tokens

World Liberty Financial has burned 100 million WLFI tokens worth $6.68 million. Onchain analyst EmberCN highlighted transactions on X, noting that four WLFI team-related wallets moved 1 billion WLFI tokens into the unlock vesting contract and burned 10%.

The move follows growing criticism surrounding the Trump-backed DeFi project as questions around transparency, token controls, and insider allocations continue to build.

Recent Burn Part of Plan to Burn 4.53 Billion WLFI Tokens

According to EmberCN, the burn is in line with the unlock rules that WLFI issued in April. Under the rules, 10% of the  45.23 billion WLFI held by the team and insiders will be destroyed.

The rules also imposed a 2-year cliff with 3-year vesting on tokens held by all insiders. This meant that institutions, founders, advisors, and partners have a longer unlock schedule once they opt it in.

At the time, the proposal stated that schedules for team-related parties are the most unfavorable. It claimed that the mandatory burn is an onchain signal of insiders’ conviction for the network.

However, there was a pushback from several users over the 2-year cliff and 2-year linear vesting for 17 billion locked tokens for early buyers.

While several users claimed this was too long, the proposal passed on May 6 with 99.9% of votes in support, as 11.2 billion tokens voted Yes.

It appears that implementation has now begun, keeping 62 billion WLFI locked for at least 2 years. The token has a maximum supply of 100 billion, with 31.77 billion already in circulation.

WLFI Continues to Struggle Amidst Controversies and Legal Battle With Justin Sun

Despite the recent burn and the potential 4.2% reduction in the token’s total supply, WLFI has yet to see any substantial price recovery. The token, which has been in decline for several months, saw a slight recovery earlier this week, gaining 2% over 7 days.

However, it is still down 54% year to date and looks poised to decline further amid controversies surrounding the project.

Several users have earlier criticized the lack of transparency. These include the WLFI team’s decision to use the token as collateral for borrowing stablecoins.

Beyond that, the project is at the center of a legal fight with crypto entrepreneur Justin Sun. Sun, who was one of the early investors, had sued WLFI for freezing his WLFI tokens

Sun spent $45 million to buy 3 billion WLFI tokens and received a 1 billion allocation after being named an advisor.  All the tokens worth over $300 million have now been frozen.

The project claimed the tokens were frozen because Sun engaged in misconduct. WLFI has also filed a defamation lawsuit against Sun over his allegations, claiming he short-sold the token.