TLDR
- WLFI governance proposed burning 100% of protocol fees to reduce token supply and support price recovery
- Token declined 30% to $0.229 after falling from $0.331 peak, with Trump family holdings now worth $5 billion
- Short liquidation clusters at $0.28 could trigger squeeze if price breaks higher from current levels
- Technical indicators show bullish divergence despite recent weakness in spot markets
- Buyback program aims to remove tokens from short-term sellers and benefit long-term holders
World Liberty Financial faces a critical juncture as WLFI price struggles following its recent market debut. The Trump-linked DeFi project has introduced a governance proposal that could reshape the token’s supply dynamics and potentially reverse its current downtrend.
The protocol’s governance team proposed using 100% of fees from liquidity positions across Ethereum, BNB Chain, and Solana to purchase and burn WLFI tokens. This mechanism would permanently remove tokens from circulation while creating scarcity for remaining holders.
WLFI ambassador “Tespmoore” confirmed the proposal favors complete fee allocation to burning rather than treasury splitting. The community response has been overwhelmingly positive, with most comments supporting the aggressive buyback approach.
Token Unlock Adds Market Pressure
A major unlock event released 24.6 billion WLFI tokens into circulation, boosting the Trump family’s combined holdings to $5 billion. The unlock coincided with increased selling pressure as large holders moved tokens to exchanges.
Data shows top 100 addresses offloaded 216.54 million WLFI worth approximately $49.15 million. Public figures dumped tokens worth $546.40 million, creating net selling pressure that pushed prices lower.
The circulating supply now stands at 27.3 billion tokens out of 100 billion total, with market capitalization reaching $6.6 billion despite the recent decline.
Derivatives Signal Potential Reversal
Short positions dominate WLFI derivatives markets across major exchanges. Binance shows shorts accounting for nearly double the long liquidations, while Bitget reports $23 million in short liquidations versus $16.6 million in longs.
Hyperliquid’s liquidation map reveals clusters near $0.28, creating potential for a short squeeze. If WLFI breaks above this level, forced covering could accelerate upward momentum toward the $0.32 resistance zone.
Technical analysis reveals bullish divergence between August 24 and September 1, with price forming higher lows while RSI printed lower lows. This pattern typically signals weakening downside momentum and potential trend reversal.
WLFI Price Prediction
The proposed burn mechanism represents a fundamental shift in WLFI’s tokenomics. If implemented, reduced supply combined with protocol usage could create positive price pressure over time.
Current technical resistance sits at $0.23 VWAP level, with breakthrough potentially triggering short liquidations at $0.28. Success above this zone could target the previous $0.32 high and establish new upward momentum.
However, continued selling from large holders poses downside risks. The concentration of tokens in founder hands creates ongoing uncertainty for price stability.
The burn proposal’s approval could mark a turning point for WLFI, transforming protocol revenue into deflationary pressure that benefits remaining token holders through supply reduction.
