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The Trump family’s crypto project, World Liberty Financial, has begun burning its namesake token in a bid to boost its price, which has been in decline since launching to the wider public on Monday.
On-chain data first reported by Lookonchain showed the platform burned 47 million World Liberty Financial (WLFI) tokens on Wednesday, permanently removing them from the supply.
The token began trading on secondary markets for the first time on Monday, with its early investors allowed to sell their holdings to the public. The token briefly hit a peak of $0.331 but it has continued to decline, dropping 3.8% in the past day to just over 23 cents.
Crypto projects undertake token burns in a bid to tighten supply and theoretically boost the value of the remaining tokens.
Burn a fraction of WLFI’s supply
CoinMarketCap shows around 24.66 billion tokens, or just over 25% of WLFI’s original 100 billion supply, have so far been unlocked, with the burn representing 0.19% of the token’s circulating supply.
The transaction on Etherscan shows that the tokens were sent to a burn wallet on Sept. 2, with Etherscan now showing that the tokens’ total supply has been reduced to just over 99.95 billion.
World Liberty put forward a proposal on Tuesday to implement a token buyback and burn program using protocol-owned liquidity fees in an effort to drive up the scarcity and price.
The team claims in the proposal that a token burn would “increase the relative ownership percentage of committed long-term holders,” while removing from circulation tokens “held by participants not committed to WLFI’s long-term growth.”
The token is down over 31% from its opening high on its launch day, as short sellers offloaded the token, a problem the token burn aims to address.
The majority of the 133 respondents in the comments section below the proposal have voiced approval, with an official vote yet to occur.
Token launch shows market needs time to mature
Kevin Rusher, founder of real-world asset borrowing and lending ecosystem RAAC, said in a statement after the launch, he thinks the hype around the WLFI token shows crypto is still struggling to grow up.
He argues that true longevity in the ecosystem will be determined by institutional adoption, not “celebrity tokens or short-term hype.”
Related: Trump family’s World Liberty stake surges to $5B after token unlock
“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,” Rusher added.
Meanwhile, Mangirdas Ptašinskas, head of marketing and community at Web3 identity and rewards platform Galxe, said the token launch sent Ethereum gas fees “into the stratosphere,” which he thinks should be a warning to builders that “Our job is still far from done.”
“If a spike in trading can suddenly push fees on a $200 transfer to $50, there is still work required to prepare the crypto ecosystem for the mainstream adoption that is undoubtedly coming,” he said.
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