World Liberty Financial plans to use all protocol revenue for WLFI buybacks and burns, attempting to restore market confidence.

After experiencing significant Fluctuation following the release of the Token, which raised doubts among investors, World Liberty Financial (WLFI) proposed a new initiative aimed at using all fees generated from its protocol's own Liquidity for Token buybacks and permanent destruction. The proposal aims to stabilize the Token value by dropping the supply, and to rebuild market trust in the project, but its ultimate effectiveness still faces challenges.

Core Proposal: Use All Protocol Fees for Burn

According to the proposal submitted by WLFI on September 12, the project plans to use all transaction fees generated from its own liquidity for an automated Token buyback and burn process. This mechanism will permanently reduce the circulating supply of WLFI Token.

• Scope of execution: This plan is only applicable to the liquidity pools directly controlled by WLFI on chains such as Ethereum (ETH) and Solana.
• Purpose: The WLFI team believes that this strategy will more closely link the Token value to the protocol usage, with each transaction reducing the supply and increasing the relative weight of long-term holders.
• Community Support: The proposal has been submitted for voting by token holders, and as of the deadline of September 18, it has received 99% support from the community.

Market Turmoil and Investor Trust Crisis

This proposal was launched after WLFI experienced a period of fluctuation.

• Price drop: The token was launched on major exchanges on September 1st. The initial trading price had once reached as high as $0.46, but within a few days, it plummeted to around $0.21, causing many early buyers to incur losses.
• Insider Controversy: The recent price drop has attracted widespread attention, especially regarding reports of the Trump family's large holdings in the Token, with their paper wealth increasing by about $5 billion on the day of the listing. Critics argue that this release benefits insiders, while retail investors bear most of the Fluctuation risk.
• Stability attempt failed: The project team attempted to stabilize market sentiment on September 2 by burning 47 million Tokens (approximately 0.19% of the total supply), but the price did not rebound.

In this context, the new buyback and burn plan is seen as a corrective measure aimed at proving to the market that the value of WLFI will be driven by actual protocol activity rather than speculation.

Controversies and Challenges: Can Supply Reduction Restore Demand?

Despite the overwhelming community support for the proposal, analysts remain cautious about its final effects. They point out that this approach has challenges:

• Future Unlocking: Future token unlocks may offset the deflationary effects brought about by burning.
• Demand uncertainty: It remains unknown whether merely reducing supply can boost prices without a clear contingency plan to stabilize demand.

Conclusion

The proposal put forward by World Liberty Financial is a direct response to the trust crisis following the release of its Token. While the full buyback and burn strategy conveys the project team's firm commitment, its ultimate success will depend on whether the project can truly establish practical applications and market demand sufficient to support its long-term value.