World Liberty Financial Proposes $120 Million Treasury Allocation for USD1 Stablecoin Growth

TLDR

• World Liberty Financial proposed using 5% of its WLFI token treasury (worth around $120 million) to increase USD1 stablecoin supply and adoption
• The proposal aims to grow USD1 partnerships across centralized and decentralized finance platforms to compete with larger stablecoins
• USD1 currently has a $2.74 billion market cap, making it the seventh-largest USD-pegged stablecoin
• Community voting on the proposal shows mixed reactions, with “against” votes slightly ahead of those in favor
• World Liberty Financial recently completed a $10 million WLFI token buyback using USD1 stablecoin

World Liberty Financial has put forward a proposal to allocate 5% of its WLFI token treasury to boost the supply and adoption of its USD1 stablecoin. The Trump family-backed project posted the plan to its governance forum on Wednesday.

The proposal would unlock approximately $120 million worth of WLFI tokens from a treasury currently valued at nearly $2.4 billion. World Liberty Financial started trading its WLFI token on exchanges in September, with 19.96 billion tokens allocated to the treasury.

The team said the additional supply would help expand USD1 use cases through partnerships with centralized and decentralized finance platforms. They believe this approach is necessary to compete in what they called an increasingly competitive stablecoin market.

According to the proposal, growing USD1’s circulation would increase demand for services governed by WLFI token holders. This includes liquidity incentives, ecosystem programs, and platform integrations.

The team stated that more USD1 in circulation leads to greater integration with users, platforms, institutions, and blockchain networks. WLFI holders would gain governance power over product expansions, incentive decisions, and cross-chain strategies.

Community Response and Current Market Position

The voting process is currently live, though the exact voting mechanism remains unclear. Community reactions to the proposal are mixed, with votes against the measure slightly outnumbering those in favor.

Some community members support the allocation as a way to reward partners building on USD1. One investor suggested directing funds toward decentralized exchanges on Ethereum and Solana, as well as centralized exchanges.

Other participants oppose using the treasury allocation for USD1 growth. Some recommended unlocking at least 80% of the total WLFI supply tokens held in the treasury instead.

USD1 launched in March and currently has a market cap of $2.74 billion according to CoinGecko data. This makes it the seventh-largest USD-pegged stablecoin on the market.

The stablecoin faces competition from established players like PayPal’s PYUSD, which holds the sixth position with a market cap $1.1 billion larger than USD1. Growing USD1 to challenge these competitors would require substantial adoption increases.

Recent Treasury Activities

World Liberty Financial recently completed a $10 million WLFI token buyback initiative over three weeks. The protocol used USD1 to purchase WLFI tokens from the open market.

Reports indicate that crypto market maker DWF Labs has been supporting USD1 through purchases totaling over $300 million. Analysis of wallet transactions revealed a three-layer liquidity structure that injected $84 million in the past month alone.

DWF Labs publicly purchased $25 million worth of USD1 tokens, with a large portion ending up on Binance. The Cantor Network announced plans to deploy USD1, which World Liberty Financial described as another step in the token’s expansion strategy.

The proposal requires future governance votes for any additional use of WLFI treasury holdings for USD1 growth. The team emphasized that WLFI serves as the governance and coordination layer for the entire ecosystem.

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