The Trump family’s cryptocurrency project, World Liberty Financial (WLFI), burned 47 million of its tokens on Wednesday to try to make the coin more valuable.
The token started trading on Monday but has dropped from its first high of $0.331 to just over 23 cents. The burn permanently removed these tokens from circulation, which can help increase the value of the remaining tokens. This is intended to reward people who hold their tokens for a long time and reduce selling by short-term traders.
According to Data from CoinMarketCap, only about 24.66 billion of WLFI’s 100 billion total tokens have been unlocked so far. The recent burn represents just 0.19% of the circulating supply. After the burn, the total number of tokens is now about 99.95 billion.
On Tuesday, World Liberty Financial made a plan to buy back tokens and burn them using money collected from the system. The plan says burning tokens will “increase the relative ownership percentage of committed long-term holders” and remove tokens “held by participants not committed to WLFI’s long-term growth.” Most of the 133 people who commented on the proposal agreed with it, but there has not been an official vote yet.
Meanwhile, the token’s launch was full of volatility, as short sellers have pushed the price down over 31% from its initial peak. Kevin Rusher, founder of the borrowing and lending platform RAAC, commented that the hype around WLFI highlights how the crypto market still relies on speculation.
“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.” He said.
Meanwhile, Mangirdas Ptašinskas, head of marketing at Web3 platform Galxe, said the token launch caused Ethereum gas fees to rise sharply. He explained, “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.”
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