WLFI’s Major Token Burn: Path to Stability or Barrier to Expansion?

World Liberty Financial (WLFI), a DeFi project with ties to the Trump family, has enacted a full-scale buyback and burn plan in response to a 41% drop in its token price since September 1. With 99.8% of votes in favor, the governance proposal redirects all treasury liquidity fees from

, BNB Chain, and toward purchasing tokens on the open market, which are then destroyed permanently [1]. This initiative is designed to shrink the circulating supply, support price stability, and reward loyal holders by introducing enforced scarcity [4].

The buyback system utilizes fees collected from protocol-owned liquidity (POL) pools across several blockchains. These fees are exchanged for WLFI on both decentralized and centralized trading platforms before being sent to a publicly verifiable burn address, guaranteeing the tokens are removed for good. The process emphasizes on-chain transparency, with all transactions trackable via services such as Etherscan and Solscan. The first burns took place in late September, but the price did not immediately recover, reflecting the overall volatility in the crypto market [1].

WLFI’s value fell to $0.18 at the start of September, marking a 60% decrease from its high of $0.33 [2]. The buyback plan was introduced after this sharp downturn, and analysts have expressed differing opinions. Crypto analyst Captain Faibik predicted a possible 25% price increase following the proposal’s approval, attributing it to renewed investor optimism [2]. Nonetheless, uncertainties remain, such as the unpredictability of fee income and liquidity limitations. Simulations estimate that with monthly treasury earnings between $100,000 and $1 million, the project could buy back 500,000 to 5 million WLFI tokens each year, though the real effect depends on market conditions and how often buybacks occur [1].

Some critics warn of risks associated with this approach. Dedicating all fees to buybacks could restrict funding for development, security audits, and user incentives, which may hinder the ecosystem’s growth [1]. Moreover, depending on both decentralized and centralized exchanges exposes the process to issues like liquidity slippage and front-running [1]. The lack of official projections for fee income also makes it difficult to judge the long-term viability of the strategy [1].

WLFI’s governance structure highlights community-led decisions, with every burn transaction open to public scrutiny. While this reflects DeFi’s commitment to transparency, the project’s Trump family connection has attracted regulatory and ethical debate [3]. Despite these challenges, WLFI has recently partnered with South Korea’s Bithumb exchange and introduced a USD1 stablecoin to boost adoption [2].

Looking forward, the effectiveness of the buyback program will depend on steady fee generation and transparent execution on-chain. Important indicators to watch include monthly treasury inflows, balances at the burn address, and trends in market liquidity. If the plan succeeds in stabilizing WLFI’s price and supports broader adoption, it could become a blueprint for deflationary token models in DeFi. However, the project must ensure that reducing supply does not come at the expense of funding for growth and operations, to maintain long-term sustainability [5].