Trump-Linked WLFI Proposes New Staking-Focused Governance System for WLFI Holders

World Liberty Financial (WLFI), the crypto project linked to the Trump family, has proposed a multi-tiered staking system that would require holders of unlocked WLFI tokens to stake their tokens for a minimum of 180 days in order to participate in governance voting. 

The proposal, published on the WLFI governance forum, also introduces a reward structure targeting a 2% annualized yield for active participants, funded directly from the WLFI treasury.

What Is WLFI and Why Does Governance Matter?

WLFI is the governance token of World Liberty Financial, a decentralized finance (DeFi) project. Governance tokens give holders the right to vote on decisions that shape a protocol's direction, from technical upgrades to treasury spending. As of this writing, WLFI is trading at $0.117 with a market cap of $3.2 billion.

The project also operates USD1, a stablecoin within its ecosystem. The new governance proposal is closely tied to USD1's recent expansion, making it relevant for both token holders and anyone tracking stablecoin developments in DeFi.

How Does the Proposed Staking System Work?

The proposal introduces three participation tiers, each with different staking requirements and benefits. All tiers use a square-root weighting model to calculate voting power. This non-linear formula considers both the amount staked and the remaining lock-up period, which is designed to prevent large holders from dominating governance outcomes entirely.

Here is a breakdown of the core staking requirements:

• Base stakers must lock unlocked WLFI for a minimum of 180 days to gain governance voting rights
• Nodes must stake at least 10 million WLFI (roughly $1 million at current prices) to access OTC conversion rights and additional incentives
• Super Nodes must stake at least 50 million WLFI (roughly $5 million at current prices) for priority partnership access and potential revenue-sharing eligibility

Holders of locked tokens, meaning tokens already subject to a vesting or lock schedule, can continue voting without the new staking requirement.

The Reward Structure

To earn staking rewards, participants must do more than simply lock their tokens. Active governance participation is a condition of the payout. Stakers who vote in at least two governance proposals during their lock-up period will receive the base reward, currently targeting approximately 2% per year. Those who hold tokens but do not vote will not receive rewards. The reward rate is paid from the WLFI treasury and is not tied to protocol revenue or operational performance.

What Are the Node and Super Node Tiers?

The Node tier is aimed at larger holders who want access to OTC (over-the-counter) conversion privileges. OTC conversion allows participants to swap USDT, USDC, or other supported stablecoins to USD1 at a 1:1 ratio through licensed market makers that WLFI partners with. 

The project subsidizes these market makers to maintain the peg, effectively passing along a spread that was previously captured by institutional intermediaries at around 10 to 15 basis points per cycle. Node status is capped at 1,000 participants initially, with rewards settled every six months.

Nodes are also required to complete standard KYC (Know Your Customer) procedures with the licensed market makers before accessing these privileges. This is a notable step for a DeFi project, as KYC onboarding has traditionally been associated with centralized finance platforms.

Super Nodes and Partnership Access

Super Node status, requiring 50 million WLFI staked, comes with guaranteed direct access to the WLFI team for partnership discussions. The proposal is explicit that Super Node status does not guarantee a partnership agreement, but it does place holders at the front of the queue. Given that WLFI says it currently receives more partnership inquiries than it can engage with productively, the Super Node tier functions as both an incentive layer and a gatekeeping mechanism.

Super Nodes may also be eligible for additional economic incentives tied to approved platform integrations, subject to compliance review and commercial negotiations.

Why Is WLFI Proposing This Now?

The timing is tied directly to the recent USD1 expansion phase, during which market makers reportedly captured millions in arbitrage profits at approximately 15 basis points per mint-and-sell cycle. WLFI also paid millions in subsidies to support redemptions during this period. The proposal frames the new staking system as a way to redirect that value toward long-term token holders rather than short-term intermediaries.

The USD1 stablecoin also briefly lost its dollar peg this week, touching $0.99707. The WLFI team attributed the move to what it described as a coordinated short and social media attack, rather than a structural failure. That context adds urgency to the proposal's goal of creating what the team calls "structural demand pressure" on competing stablecoins.

What Happens If the Proposal Passes?

If the community votes in favor, implementation would roll out in three phases. Phase 1 covers the launch of governance staking and reward activation. Phase 2 brings Node tier benefits online, including OTC conversion and KYC onboarding. Phase 3 activates the Super Node tier with partnership access and revenue-share frameworks. Specific timelines have not yet been confirmed and will be communicated after the voting period closes.

The proposal requires a quorum of 1 billion eligible WLFI voting tokens and a simple majority to pass. The voting window runs for seven days from the date the proposal moves to a Snapshot vote, the standard off-chain voting platform used across DeFi governance.

Conclusion

The WLFI governance staking proposal introduces a tiered participation structure that links voting rights to a minimum 180-day staking commitment for unlocked token holders. It uses square-root weighting to distribute voting power, offers a 2% APR target for active voters, and creates two additional tiers for larger stakers with OTC conversion access and partnership priority. 

The system is designed to redirect arbitrage value that previously flowed to market makers during the USD1 expansion back to long-term protocol participants. A quorum of 1 billion WLFI tokens and a simple majority are required for the proposal to take effect.

Resources

1. World LibertyFi Proposal: Proposal: WLFI Governance Staking System

2. World LIbertyFi on X: Post on Feb. 26

3. Report by The Block: World Liberty Financial proposes new staking-focused governance system for WLFI holders