World Liberty Financial (WLFI) sparked strong community criticism after a governance vote concluded in early January 2026 that approved a proposal to use treasury funds to accelerate adoption of its USD1 stablecoin. The dispute intensified around January 20, as on‑chain analysis and community investigators flagged concentrated voting and possible votes from addresses tied to the project team.
On‑chain data reviewed by independent researchers showed extreme concentration of voting power. The top nine wallets held roughly 59% of the voting weight, with the single largest wallet controlling about 18.786%. The decisive votes that carried the USD1 growth proposal were attributed, by an anonymous on‑chain researcher identified as DeFi^2, to addresses linked to the WLFI team or strategic partners.
That dynamic mattered because a large segment of investor tokens were locked and therefore unable to participate. Reports indicated that up to 80% of tokens sold to investors remained locked at the time of the vote, effectively preventing those holders from influencing a decision that directly affects token economics and treasury use.
Revenue allocation and governance mechanics
Project documentation reviewed during the dispute showed a revenue split that routes the majority of protocol net income to affiliated parties rather than to WLFI token holders. According to those documents, 75% of net income is directed to entities associated with the Trump family and 25% to entities linked to the Witkoff family; token holders receive no direct share of protocol income.
Critics argued this arrangement creates a misalignment of incentives: treasury resources would be deployed in service of USD1 growth while core concerns — notably token unlock schedules and the ability of holders to submit governance proposals — remained unresolved. Under the current governance rules, token holders cannot create their own proposals, a structural limitation that community members said amplified the effect of concentrated voting.
For traders, treasuries and institutional holders, the immediate implications are clear: governance centralization can increase execution risk for protocol initiatives and raise the probability of rapid shifts in token utility or treasury allocation. Liquidity constraints tied to locked tokens reduce market depth and can amplify price moves when unlocks occur.
Investors and market participants are now focused on the token‑unlock schedule and whether WLFI will revise its governance rules or revenue distribution after the backlash. Any future votes to adjust unlocking timelines, governance access or revenue sharing will be closely watched as the primary test of whether the protocol will address the structural grievances raised during this episode.
