70% of World Liberty Financial’s tokens are reserved for insiders: report

A draft white paper obtained by CoinDesk reveals that 70% of the governance token of the World Liberty Financial project, WLFI, is reserved for insiders, including founders, team members and service providers.

The white paper also shows that WLFI will not be transferable until there is regulatory clarity for these tokens.

Token allocation

Former US President Donald Trump and his children have heavily promoted World Liberty Financial, positioning 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 “hidden” traditional financial system.

Despite these promises, the proposed allocation of WLFI tokens has raised concerns in the crypto community.

According to the report, most of them will be controlled by a select group of insiders, with only 30% earmarked for public sale. In particular, a part of the funds raised from this public sale is also allocated to the project experts, while the remaining funds will be kept in a treasury to support operations.

The story states that when an advisor to these early-stage projects was asked about the 70% insider allocation, he responded by calling it a “joke.”

This allocation model also differs from those used by other major blockchain projects. For example, Ethereum’s Genesis block set aside about 16.6% of its Ether (ETH) supply for early contributors, while Cardano kept about 20% of its ADA tokens. By comparison, the pseudonymous creator of Bitcoin, Satoshi Nakamoto, is estimated to have about 5% of the total supply.

However, World Liberty Financial has yet to finalize its tokenomics, with the project team reportedly working on adjustments.

The tokens will be non-transferable

WLFI tokens will also be non-transferable. This means that once purchased, they cannot be traded or transferred between users, a measure intended to protect 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 meet legal requirements.

Buyers will also undergo screening to ensure they are not on sanctions lists, although the document mistakenly refers to FinCEN rather than the Office of Foreign Assets Control (OFAC).

Meanwhile, the project has also attracted the unwanted attention of scammers and hackers. Recently, the X accounts of Lara Trump, wife of Eric Trump, and Tiffany Trump, the youngest daughter of Donald Trump, were hacked and used to promote a fraudulent crypto token pretending to be World Liberty Financial.

SPECIAL OFFER (Sponsored) Binance Free $600 (Exclusive to CryptoPotato): Use this link to register a new account and receive an exclusive welcome offer of $600 to Binance (full details).

2024 LIMITED OFFER on BYDFi Exchange – Up to $2888 Welcome Reward, Use this link to register and open a 100 USDT-M position for free!