World Liberty Financial, the company behind the Trump-backed USD1 stablecoin, has proposed a major governance overhaul. The plan requires WLFI token holders to stake their assets to vote and grants exclusive market-making rights for USD1 to those who stake over 10 million tokens, currently worth around $1 million. This move follows a recent coordinated attack that briefly knocked the stablecoin off its peg and led to significant user withdrawals.
World Liberty Financial has proposed a governance system that puts a price on the ability to profit from market making its USD1 stablecoin. The proposal states that those who stake 10 million WLFI tokens, termed Node stakers, will gain the right to convert USD1 directly to other stablecoins through partner market makers.
This allows Node stakers to capture arbitrage opportunities from small price differences. “WLFI subsidises the market makers to maintain one-to-one parity, effectively passing the arbitrage opportunity — which today is captured exclusively by institutional market makers at ~10–15 bps — to Node stakers,” the project stated.
At current prices, becoming a Node staker requires a commitment of approximately $1 million. The USD1 stablecoin has grown to become the fifth-largest stablecoin with a circulating supply exceeding 4.7 billion.
The proposal follows an incident where the project suffered a “coordinated attack.” An official post on X said attackers hacked co-founder accounts and spread fear to profit from short positions.
USD1 returned to its peg the same day, but over $290 million has been withdrawn since. The new staking system also mandates a minimum 180-day lock-up for all governance participants.
Voting power will be weighted by stake size and lock-up duration to prevent excessive concentration. “This ensures that voting power is held by participants with long-term alignment to the protocol who elect to participate in the governance consensus mechanism, not short-term holders or speculators,” the project said.
Stakers who commit over $5 million receive additional benefits like direct team access. Participants will also earn WLFI token rewards at an annual rate of around 2% for voting, funded by the project’s treasury.
The WLFI token price fell roughly 1.6% after the proposal was posted.
