WLFI came under heavy pressure after a controversial governance proposal involving the unlock of 62 billion tokens triggered a sharp market reaction. The token fell from $0.073 to $0.064, marking a 14% decline as traders reassessed the project’s future supply outlook.
Large unlock plan weighs on sentiment
Under the proposal, roughly 45 billion WLFI would be allocated to founders, advisors, and early partners. These tokens would be subject to a two-year cliff followed by a three-year vesting schedule. Another 17 billion tokens are reserved for early supporters under a similar structure. While long vesting periods are often designed to reduce immediate selling pressure, the market appears focused on the broader implication of a much larger future token supply.
The proposal is currently open for governance voting until May 7. On-chain voting results have shown near-unanimous support so far, suggesting strong backing at the governance level. Even so, that approval has not translated into confidence in the secondary market, where investors remain cautious about the long-term tokenomics impact.
Community criticism grows despite governance support
Although the proposal has received overwhelming on-chain approval, community sentiment has turned notably negative. Prominent industry figures including Moonrock Capital’s Simon Dedic and Tron founder Justin Sun have criticized the plan. The main concern is that such a large unlock, even with delayed vesting, could alter expectations around WLFI’s long-term supply-demand balance and put pressure on valuation.
The situation is further complicated by discussion of a potential token burn mechanism that could permanently remove 4.5 billion tokens from supply. That introduces an additional layer of uncertainty: the project is simultaneously discussing a major unlock and a possible burn, making it harder for the market to assess the eventual net supply effect.
Price action reflects forward-looking supply concerns
WLFI’s decline appears to reflect more than a simple reaction to governance mechanics. Instead, it highlights how quickly traders price in future token supply changes, especially when the amounts involved are substantial. Even with multi-year vesting terms, large unlock proposals often raise concerns in crypto markets. As the voting deadline approaches, WLFI’s near-term price action will likely remain tied to evolving expectations around token release schedules, community response, and any further clarity on the proposed burn mechanism.