Trump Family’s Crypto Project Burns Tokens to Stabilize Prices
The crypto initiative from the Trump family, World Liberty Financial, has started the process of burning its associated token as a strategy to enhance its price, which has been on a downward trend since its public launch on Monday.
Onchain data initially reported by Lookonchain indicated that the platform burned 47 million World Liberty Financial (WLFI) tokens on Wednesday, permanently eliminating them from the overall supply.
The token began trading on secondary markets for the first time on Monday, allowing its initial investors to sell their holdings to the public. It reached a peak of $0.331 but has since continued to fall, declining by 3.8% in the last day to a little over 23 cents.
Crypto projects typically execute token burns in an effort to constrict supply, which theoretically can enhance the value of the remaining tokens.
According to CoinMarketCap, approximately 24.66 billion tokens, or just above 25% of WLFI’s original supply of 100 billion, have been unlocked thus far, with the burn accounting for 0.19% of the token’s circulating supply.
The transaction on Etherscan indicates that the tokens were transferred to a burn wallet on Sept. 2, and Etherscan now reports that the total supply of tokens has dropped to slightly over 99.95 billion.
World Liberty proposed on Tuesday to introduce a token buyback and burn program utilizing protocol-owned liquidity fees in a bid to increase scarcity and subsequently the price.
The team asserts in the proposal that a token burn would “increase the relative ownership percentage of committed long-term holders,” while eliminating tokens “held by participants not committed to WLFI’s long-term growth.”
Since its launch day, the token has declined over 31% from its opening high, primarily due to offloads by short sellers, an issue that the token burn intends to tackle.
The majority of the 133 participants responding in the comments section below the proposal have expressed support, although an official vote has yet to take place.
Kevin Rusher, founder of the real-world asset borrowing and lending ecosystem RAAC, remarked in a statement after the launch that the excitement surrounding the WLFI token reflects the ongoing challenges crypto faces in maturing.
He contended that real sustainability in the ecosystem will hinge on institutional adoption, rather than on “celebrity tokens or short-term hype.”
“The concern, however, is that such blatantly speculative trading continues to damage trust in crypto, and that’s the opposite of what is required to build a truly resilient, long-term financial system,” added Rusher.
In the meantime, Mangirdas Ptašinskas, head of marketing and community at the Web3 identity and rewards platform Galxe, noted that the token launch caused Ethereum gas fees to “skyrocket,” suggesting it serves as a wakeup call to builders that “our job is still far from done.”
“If a spike in trading can suddenly elevate fees on a $200 transfer to $50, there is still work needed to prepare the crypto ecosystem for the mainstream adoption that is undoubtedly forthcoming,” he stated.
