World Liberty Financial is facing criticism after a governance vote approved the allocation of up to 5% of unlocked treasury tokens to support its stablecoin USD1, while 80% of investor tokens remain locked.

The decentralized finance project backed by the Trump family proposed at the end of December to deploy treasury funds for incentive programs around USD1 and strategic partnerships.

Early voting data showed about 67% opposition to the measure, even though the proposal remained open until the January 4 deadline.

Token holders expressed frustration at not being able to vote on the unlocking of their own holdings, while the team pushed forward proposals benefiting the growth of USD1.

What happened

The governance proposal aimed to use less than 5% of the unlocked WLFI cash reserves, worth approximately $120 million, for USD1 adoption programs.

World Liberty Financial sold $550 million worth of tokens to the public until March, with buyers receiving locked tokens at prices ranging from $0.015 to $0.05.

The project unlocked 20% of the tokens sold in September, allowing for partial withdrawals, while the remaining 80% remain locked for an indefinite period.

Since this partial unlocking, WLFI has fallen by about 60% from its all-time high, which has reduced the unrealized gains of locked holders.

Token holders cannot create their own governance proposals in the current system, which fuels criticism that the team has prioritized the growth of USD1 at the expense of the token unlock schedule.

Also read: BitMine Staking Crosses 1.77M ETH As Ethereum Exchange Balances Hit Multi-Year Lows

Why it matters

According to the project documentation, the revenue structure allocates 75% of the net revenue of the protocol to entities related to the Trump family and 25% to entities associated with the Witkoff family.

President Donald Trump owns 70% of DT Marks DEFI LLC, which receives most of the revenue from the sale of WLFI tokens and the interest generated by the stablecoin USD1.

World Liberty Financial has filed this month for a national trust bank license in the United States to place the issuance and custody of USD1 under a regulated framework.

The project also launched World Liberty Markets, an onchain lending and borrowing platform built around USD1 and the governance token WLFI.

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