Slow Rug? Trump-Associated World Liberty Fi Accused Of Value Extraction

A governance vote at World Liberty Financial (WLFI), a DeFi challenge marketed across the Trump model, is drawing allegations of “sluggish” worth extraction after a outstanding dealer claimed affiliated wallets pushed by way of a proposal whereas many public holders remained unable to entry or vote with their tokens.

DeFi^2 (@DeFiSquared), who describes himself because the #1 ranked dealer on Bybit in 2023 and 2024, wrote on X that he was “mentioning an alarming governance vote by World Liberty Fi this month that seems to be the beginning of a sluggish extraction of worth from WLFI holders by the staff.”

World Liberty Fi Hit With ‘Rigged Vote’ Claims

DeFiSquared wrote: “What you see above seems to be a rigged vote, the place the vast majority of high voters are indicated to be staff wallets or strategic companion wallets by Bubble Maps. This is in distinction to the actual voters decrease within the screenshot, who’ve all been locked from accessing their WLFI tokens since TGE, and unable to vote on an unlock till the staff permits it.”

The proposal on the middle of the thread is what he calls the “USD1 progress proposal.” He argues it reads as “pretty mundane” on its face, however says the governance sequencing is the inform: “why would the staff exit of their method to pressure this vote by way of, as a substitute of voting on the WLFI token unlock that almost all of holders are asking for?”

His thesis hinges on WLFI economics. DeFiSquared claims WLFI holders “will not be entitled to ANY protocol income in any respect,” and says the challenge’s “Gold Paper” specifies income routing: “75% of protocol income goes to the Trump household, and 25% goes to the Witkoff household.” In his framing, that creates a perverse incentive: “It’s truly as loopy because it sounds: the staff is forcing a vote to promote WLFI tokens on the expense of locked holders, to be able to fund protocol income that goes solely to themselves.”

He additionally alleges the vote’s end result was manufactured late within the course of. “This vote was truly failing by the point it reached quorum with a majority of votes rejecting the proposal, till the staff / companions compelled the vote by way of,” he wrote, including token allocation context: “the WLFI staff is allotted 33.5% of all tokens and strategic companions one other 5.85%, whereas the general public sale was allotted solely 20%.”

Post-vote, he factors to on-chain flows as corroboration, citing “recent transfers resembling this considered one of 500 million WLFI tokens to Jump Trading,” whereas “investor WLFI allocations stay forcibly locked.”

DeFiSquared closes with a valuation and positioning name: “it’s tough to see the intrinsic worth behind a 17 billion greenback token that has no actual governance energy, no income share, and new basis promote strain occurring for their very own profit.” He provides he has shorted WLFI “on and off since pre-market costs above $0.34,” and expects continued draw back “attributable to dilution, intentional extraction,” and “different components associated to Trump’s final term in office.”

At press time, WLFI traded at $0.1608.