World Liberty Financial Proposes Unlocking 62 Billion Tokens Amid Loan Controversy

World Liberty Financial has introduced a proposal to unlock 62.3 billion WLFI governance tokens, fundamentally altering the token's economic structure. Originally marketed as non-transferable governance assets with indefinite locks, the new proposal introduces a defined path to liquidity for insiders and early supporters. This shift comes amid significant turmoil for the venture. Reports recently surfaced that the project used 5 billion WLFI tokens as collateral on the Dolomite lending platform to borrow $75 million in stablecoins, a portion of which was routed to Coinbase Prime. Following these revelations, the token dropped 12% to a record low. The proposed vesting schedule splits the supply into two tiers. Early supporters holding 17 billion tokens would face a two-year cliff followed by a two-year linear vest. Founders, team members, and advisors holding 45.2 billion tokens would face a two-year cliff and a three-year vest, with 10% of their allocation—approximately 4.5 billion tokens—burned immediately upon passage. Market sentiment remains strained, with the token trading near $0.079, a decline of roughly 48% from the average price of recent treasury buybacks totaling $65.6 million. The project has also faced public criticism from former backer Justin Sun, who accused the team of treating users as 'personal ATMs.' The proposal requires a quorum of 1 billion WLFI and a simple majority to pass. Given the current distribution of tokens, the measure could potentially be approved by a fraction of the founders' and team's allocations alone.