Trump Family Coin 'Lockup Bomb'...WLFI Plunges 15% in One Day

▲ WLFI/ChatGPT generated image

World Liberty Financial (WLFI), a cryptocurrency project associated with the family of former U.S. President Donald Trump, faced strong market backlash, plunging more than 15% in a single day amid controversy surrounding a large-scale token lockup proposal.

According to cryptocurrency media outlet The Crypto Basic on April 30 (local time), WLFI announced a governance proposal to isolate over 62 billion WLFI from the market for at least two years to control the circulating supply of recently listed tokens. This proposal was unveiled on April 15, with its primary goal being to curb immediate selling and buying pressure in the market.

Voting began on April 29 and is scheduled to run until May 7. So far, the results show an overwhelming trend in favor. Approximately 6 billion WLFI voted in favor, while only 3.2 million WLFI voted against. The minimum quorum of 1 billion WLFI required for decision-making has already been met. If the proposal passes, early investors will receive their tokens in installments over an additional two years after a two-year lockup. Insiders, including founders and advisors, will be subject to stricter conditions, with a vesting period of up to three years after the initial lockup.

However, despite the apparent support rate, strong criticism has emerged from the industry. Simon Dedic, founder of Moonrock Capital, claimed that this measure is virtually a rug pull targeting early investors. Justin Sun, founder of Tron and a major WLFI holder, also pointed out that this proposal is the most irrational governance decision he has ever seen.

Questions are also being raised about the voting structure and timing. Some point out that the token vesting schedule overlaps with the remainder of Trump's presidential term, and the possibility of tokens in non-participating wallets being frozen for an extended period is also a concern. Among investors, dissatisfaction is spreading that the project team is attempting to artificially control liquidity to maximize profits.

World Liberty Financial tried to achieve price stability by controlling supply but instead faced a backlash of eroded trust. As governance controversies intertwined with political influence expand, market uncertainty is likely to persist for some time.

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