WLFI Proposes 4.5B Token Burn, Tightens Vesting

World Liberty Financial (WLFI) unveiled a governance proposal that would remove up to 4.5 billion WLFI from circulation by trimming insiders’ locked allocations and tightening vesting schedules. The proposal will be decided by a seven-day on-chain governance vote.

The plan would restructure vesting for more than 62 billion WLFI held by early supporters, founders, team members and partners. Participants who opt into the revised terms would accept a permanent 10% reduction of their locked allocations, which WLFI estimates could permanently remove as many as 4.5 billion tokens. Tokens that remain under the revised schedule would be nontransferable for two years and then would release linearly over three years.

Holders who decline the 10% reduction would keep their full allocations but face the same two-year cliff and a shorter vesting timeline. WLFI presents the proposal as a choice between accepting extended vesting terms or remaining locked indefinitely, which would prevent immediate sale of those tokens for at least two years.

WLFI reported that roughly 77% of the locked supply has not participated in governance votes since the protocol launched. The proposal is intended to alter how locked tokens are released and to encourage governance participation over the next two years.

The governance vote requires a quorum of 1 billion WLFI and passage by simple majority. If approved, individual participants will have a limited window to accept the revised terms. The final scale of any token burn will depend on how many insiders opt in, so the ultimate reduction in circulating supply is uncertain.

WLFI expects the revised schedule to slow the pace at which locked tokens enter circulation, which the protocol says should reduce near-term selling pressure while delaying liquidity for insiders.

The proposal comes amid a public dispute with crypto entrepreneur Justin Sun, who accused the protocol of installing mechanisms that could restrict token movements and governance functions. WLFI denied those allegations and warned of possible legal action.

Market reaction has been volatile: the WLFI token fell more than 14% over the past week and was trading around $0.0807 at the most recent check.