World Liberty Financial (WLFI) Price: Token Burning Program Proposed After 30% Drop
TLDR
World Liberty Financial proposed using 100% of protocol fees to buy back and burn WLFI tokens
WLFI prices fell approximately 36% from peak of $0.331 to $0.210 before stabilizing at $0.229
Top 100 addresses offloaded 216.54 million WLFI (worth $49.15 million)
Short liquidation clusters near $0.28 could trigger a potential breakout if prices rise
WLFI shows bullish divergence with price forming higher lows while RSI prints lower lows
The Trump family-backed decentralized finance project World Liberty Financial has unveiled a governance proposal aimed at implementing a token buyback and burn program. This move comes as the WLFI token experiences a 30% price drop following its recent exchange debut.
The proposed mechanism would use all protocol fees generated from the platform’s liquidity positions across Ethereum, BNB Chain, and Solana to purchase WLFI tokens from the market. These tokens would then be permanently destroyed through burning.
If approved, the program would reduce the circulating supply of WLFI, which began trading on exchanges on Monday. The proposal has received mostly positive feedback in the comments section.
The token burning strategy aims to increase the relative ownership percentage of long-term holders and create a direct link between platform usage and token scarcity.
“This program removes tokens from circulation held by participants not committed to WLFI’s long-term growth. and direction, effectively increasing relative weight for committed long-term holders,” stated the proposal.
WLFI Buyback & Burn Proposal
Community Explainer@worldlibertyfihttps://t.co/UEQuApudiN
This proposal suggests using all protocol-owned liquidity (POL) fees earned by WLFI to buy back WLFI tokens from the market and burn them permanently.
It does not apply to community…
— tespmoore (@tespmoore) September 1, 2025
Market Pressure and Price Action
WLFI prices have declined since launch as short sellers offloaded the token. The price fell around 36% from its peak of $0.331 to a low of $0.210 before rebounding slightly to $0.229.
On-chain data reveals why the spot market appears weak for WLFI. The top 100 addresses have sold approximately 216.54 million WLFI tokens, worth close to $49.15 million at an average price of $0.227.
While Smart Money accounts picked up over 102.78 million WLFI during the same period (valued around $23.33 million), public figures, including known KOLs and market personalities, dumped close to $546.40 million worth of tokens.
Whales holding between one and ten million tokens added 26.85 million WLFI (worth about $6.10 million). However, this accumulation is minor compared to the outflows from top addresses and public figures.
Potential Triggers for Price Recovery
Despite spot market weakness, the derivatives market offers a different perspective. WLFI’s perpetual contracts have been active since August 23, even before spot trading began.
Across exchanges like Binance, Bitget, and Hyperliquid, short positions currently dominate. On Binance alone, shorts account for nearly double the long liquidations. Bitget shows short liquidations above $23 million, compared to just $16.6 million for longs.
Hyperliquid’s seven-day liquidation map reveals clusters near $0.28, creating conditions for a potential short squeeze if prices rise above this threshold. This could force shorts to cover their positions, possibly accelerating a rally toward $0.32.
From a technical standpoint, WLFI shows a bullish divergence pattern. Between August 24 and September 1, the token formed higher lows in price while the Relative Strength Index (RSI) extended to fresh lower lows. This pattern often signals weakening downside momentum.
On Bybit’s spot chart, WLFI trades just under the Volume-Weighted Average Price (VWAP) line near $0.23. A move above this level could align technical momentum with derivatives positioning.
The token has a circulating supply of 27.3 billion out of a total 100 billion and a market capitalization of $6.6 billion. A large token unlock on Monday added 24.6 billion tokens to circulation, increasing the Trump family’s holdings to $5 billion.
World Liberty Financial collects trading fees from its protocol-owned liquidity and would use these fees to purchase WLFI tokens from short-term sellers under the proposed burn program.
The proposal mentions some uncertainties, including difficulty estimating the burn impact on supply due to unknown fee amounts. There’s also no contingency plan for treasury emergency funding after committing 100% of fees to burning.
WLFI currently trades at $0.229, down almost 30% from its launch price.
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Filed under: Bitcoin - @ September 2, 2025 11:27 am