WLFI Proposes 100% POL Fees for Token Buybacks and Burns

WLFI proposes using 100% of protocol-owned liquidity fees for token buybacks and burns to reduce supply and boost long-term value.

The governance community of World Liberty Financial Inc. (WLFI) has introduced a proposal that would significantly alter how the project manages its liquidity revenue. The plan states that the entire fee generated by protocol-owned liquidity (POL) must be consumed to repurchase WLFI tokens in the open market and burn them effectively. This is to decrease the supply in the market and to fortify the value of the tokens in the long run.

WLFI to Burn Tokens Using POL Fees on ETH, BSC, and Solana

It is a growing trend in the decentralized finance (DeFi) industry, especially among initiatives that aspire to create sustainable value to token holders through a buyback-and-burn approach. Under the above model, all the fees obtained on WLFI-owned liquidity pools on Ethereum, Binance Smart Chain, and Solana would be used to purchase WLFI tokens on the open market. That would then be sent to a burn address, effectively eliminating them from circulation.

This program does not include the third-party or community-operated liquidity pool fees. In this way, it is only protocol-owned assets that are being taken into consideration, which means that the internal resources of WLFI are utilized to subsidize the long-term economics of the token. The stakeholders in the proposal claim that such a solution assists in eliminating tokens in circulation, which might end up in the hands of short-term traders or non-aligned traders. The proposal will help to advantage long-term holders by lowering supply.

The proposal is a huge step in the strategy of WLFI, which officially launched its token on September 1. The market has been very volatile since the debut, so people want a plan to support prices and build investor confidence. Additionally, the plan links protocol usage to token scarcity. Therefore, when trading activity increases, fees rise, and more tokens are bought and burned. Burns would be transparent and publicly verifiable on-chain and would be reported to the community regularly.

Trump Family Sees $5B Windfall from WLFI Token Surge

Even though this strategy has been well-received at first, there are some trade-offs to consider. For example, the community also discussed other options. They thought about keeping the POL fees in the treasury to support the community’s operations. Alternatively, they considered splitting the income between token burns and the treasury. However, many believe that burning 100 percent of the fees is better for the ecosystem right now. This approach avoids keeping funds idle in the treasury. Therefore, it helps to reduce the token supply more effectively. As a result, it strengthens the value for long-term holders.

If the proposal is approved, it will set a new precedent for how WLFI handles internal revenue. The team mentioned that this could become the foundation of a bigger buyback-and-burn policy. Moreover, they may add other sources of revenue to this plan as the ecosystem grows. In the future, the policy can be improved to include income from different protocol services, not just POL fees. This shows that WLFI is open to evolving and adapting its strategy over time.

Parallel to the developments of governance, WLFI remains in the limelight because of its high-profile supporters. Indeed, the Trump family which had been involved in the start-up of World Liberty Financial, is said to have grown its net worth up to 5 billion dollars after the release of the token. The old president is an honorary co-founder and his three sons are mentioned as official co-founders. According to public records, the family carries less than 25 percent of the token supply, but such a holding has already surpassed the value of most of their traditional real estate holdings.