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- WLFI faces backlash as major wallets dominate voting while locked holders lose access.
- Concentrated voting power raises scrutiny as nine wallets control most WLFI governance.
- Critics warn USD1 proposal dilutes holders who receive no revenue from WLFI assets.
World Liberty Financial (WLFI) is under pressure after a governance vote approved its USD1 growth proposal while many locked WLFI holders were unable to take part. Critics say the voting process gave excessive influence to a small group of large wallets.
On-chain records show that top wallets flagged as team-linked or tied to strategic partners cast the largest “FOR” votes. Researcher DeFiSquared stated that these wallets shaped the entire outcome.
The nine top wallets represented about 59% of total voting power. The largest address alone held 18.786% of the voting weight during the snapshot period for the proposal.
WLFI Governance Imbalance Raises Concerns
According to DeFiSquared, the scenario resulted in an imbalance between voting power and a large portion of holders. The researcher reported that a significant number of investors were unable to vote on an unlock until the team unlocks it.
The researcher asked why governance was applied to further the USD1 expansion instead of dealing with limitations to a large portion of the community. They cited the Gold Paper of the project, which indicates that the holders of WLFI receive no protocol revenue at all.
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According to the document, 75% of net income is provided to entities associated with the Trump family. The remaining 25% is allocated to entities related to the Witkows family.
Critics Push Back on WLFI Token Issuance Approach
A holder who voted against the proposal argued that the measure would create dilution without offering a clear return. The user said WLFI previously deployed more than nine figures of investor capital to build a treasury of Bitcoin, Ether, and Chainlink.
They stated that holders receive no direct benefit from these assets. They added that the project could use part of its altcoin holdings to support USD1 incentives instead of issuing more tokens.
Earlier this month, WLFI submitted an application for a national trust banking charter in the United States. The license would allow the firm to issue, custody, convert, mint, and redeem USD1 under a single regulated entity.
The charter would also enable fee-free transfers between USD1 and the U.S. dollar. The move is part of a wider effort to place stablecoin operations inside a regulated framework. Last week, WLFI launched World Liberty Markets. The platform supports on-chain borrowing and lending built around USD1 and the WLFI governance token.
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