World Liberty Financial Reserves 70% of Its WLFI Tokens for Insiders, Raising Concerns in Crypto Community
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- 2024-09-06 09:17:13261browse
Former U.S. President Donald Trump and his sons have heavily promoted World Liberty Financial, positioning it as a revolutionary tool in finance and claiming it could empower everyday people.
CoinDesk obtained a draft white paper revealing that 70% of the World Liberty Financial project governance token, WLFI, will be reserved for insiders.
The white paper also states that WLFI will not be transferable until there’s regulatory clarity for such tokens.
Token Allocation
Former U.S. President Donald Trump and his sons have promoted World Liberty Financial extensively, presenting it as a revolutionary tool in finance and claiming it could empower everyday people. The platform has also been pushed as a solution to what the Trump family describes as a “rigged” traditional finance system.
However, the proposed allocation of WLFI tokens has raised concerns within the crypto community.
According to the report, most of the tokens will be controlled by a select group of insiders, with only 30% allocated for public sale. A portion of the funds raised from this public sale will also be allocated to project insiders, while the remaining funds will be held in a treasury to support operations.
When asked about the 70% allocation for insiders, an advisor to such early-stage projects reportedly called it a “joke.”
This allocation model also differs from those used by other major blockchain projects. For instance, Ethereum’s Genesis block reserved roughly 16.6% of its ether (ETH) supply for early contributors, while Cardano kept about 20% of its ADA tokens. In comparison, Bitcoin’s pseudonymous creator, Satoshi Nakamoto, is estimated to hold around 5% of the total supply.
However, World Liberty Financial has yet to finalize its tokenomics, with the project’s team reportedly working on adjustments.
Tokens Will be Non-transferrable
WLFI tokens will also be non-transferable. This means that once purchased, they cannot be traded or transferred between users, a move intended to safeguard against potential securities law violations.
The white paper specifies that they will be locked indefinitely in a wallet or smart contract until possibly unlocked through governance procedures that comply with legal requirements.
Purchasers will also undergo screening to ensure they are not on sanction lists, though the document erroneously refers to FinCEN instead of the Office of Foreign Assets Control (OFAC).
Meanwhile, the project has also attracted unwanted attention from fraudsters and hackers. Recently, the X accounts of Lara Trump, wife of Eric Trump, and Tiffany Trump, Donald Trump’s youngest daughter, were hacked and used to promote a fraudulent crypto token pretending to be World Liberty Financial.
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