The Trump family-backed crypto venture World Liberty Financial (WLFI) has proposed a new governance staking system to boost participation and incentivize use of its stablecoin, USD1. The proposal requires a 180-day token lock-up for voting power, offering a 2% annual reward. It also includes new benefits for USD1 usage and special conversion services for large token holders, aiming to increase the stablecoin’s adoption in a market dominated by USDT and USDC.
The World Liberty Financial team suggested governance votes should require holders to stake their tokens for at least 180 days. This aims to ensure “voting power is held by participants with long-term alignment to the protocol.”
Stakers would earn an annual percentage rate of 2% provided they participate in at least two governance votes during the lock-up period. Governance power would be based on the amount staked and the remaining lock-up time.
As part of the staking system, users would also gain additional benefits for USD1 usage. USD1 deposits made on the WLFI Markets platform would attract unspecified incentives from the DeFi protocol Dolomite.
Holders with at least 10 million WLFI tokens, designated as “Nodes,” will gain access to providers offering 1:1 conversion of other stablecoins into USD1. “Super Nodes,” or holders with more than 50 million WLFI tokens, will also have access to this feature and a future revenue-sharing framework.
For the vote to be valid, the proposal requires one billion voting tokens to participate, with a majority needed to pass. CoinGecko lists over 27 billion WLFI tokens in circulation.
If approved, the rollout will occur in three phases. These phases start with staking rewards and USD1 deposit incentives, followed by the conversion feature and finally partnership access.
The total market capitalization for stablecoins is over $309 billion, according to DeFi aggregator DefiLlama. USDT has the largest market cap with over $183 billion and a 59% market dominance.
Circle’s USDC is the second-largest stablecoin with a $75 billion market cap. WLFI’s USD1 is the fifth-largest stablecoin with a $4.7 billion market capitalization.
