WLFI Proposes Governance Staking System With 180-Day Lock-Up, USD1 Stablecoin Incentives

World Liberty Financial (WLFI), the Trump family-backed crypto venture, has introduced a governance proposal requiring token holders to stake their WLFI tokens for a minimum of 180 days to participate in protocol votes, with stakers earning approximately 2% annual rewards contingent on active participation in at least two governance votes during the lock-up period.

The proposal also outlines incentives for usage of WLFI’s USD1 stablecoin, the fifth-largest stablecoin by market capitalization at $4.7 billion, including enhanced benefits for stakers and exclusive conversion features for large holders designated as “Nodes” and “Super Nodes.”

Governance Restructuring: Staking-Based Voting Power

The WLFI team submitted the governance proposal on February 25, 2026, seeking to reshape how participation, incentives, and decision-making function across its ecosystem. The core mechanism requires holders of unlocked WLFI tokens to stake their assets for a minimum lock-up period of 180 days to qualify for voting on governance matters.

Voting power under the proposed framework would be weighted by both the amount staked and the remaining time in the lock-up period, ensuring that influence is concentrated among participants with sustained exposure to the protocol rather than short-term holders or speculators. Tokens that are already locked retain voting rights without requiring additional staking.

Stakers who participate in at least two governance votes during the lock-up period would earn an annual percentage rate of approximately 2%. The reward structure is designed to incentivize active engagement rather than passive holding, reinforcing the proposal’s emphasis on long-term alignment between governance participants and protocol interests.

Tiered Participation Structure: Nodes and Super Nodes

The proposal introduces a tiered participation system that distinguishes standard stakers from higher-level participants designated as “Nodes” and “Super Nodes.” Nodes are defined as holders with at least 10 million WLFI tokens, while Super Nodes hold more than 50 million WLFI tokens.

These verified large holders would gain access to exclusive features, including direct conversion mechanisms that enable 1:1 exchange of other major stablecoins—such as USDC and USDT—into USD1. Nodes and Super Nodes would also be able to provide off-ramp services directly to fiat currency, creating a privileged position within the USD1 distribution network.

The tiered structure is intended to formalize a closer relationship between WLFI’s governance token and its stablecoin strategy, redirecting value historically captured by intermediaries toward ecosystem-aligned participants while strengthening USD1’s competitive position against larger dollar-pegged stablecoins.

USD1 Stablecoin Incentives and Distribution

The proposal places significant emphasis on USD1, WLFI’s dollar-backed stablecoin that currently ranks as the fifth-largest stablecoin by market capitalization at $4.7 billion. According to DeFi aggregator DefiLlama, the total stablecoin market capitalization exceeds $309 billion as of February 26, 2026, with Tether’s USDT leading at over $183 billion (59% market dominance) and Circle’s USDC second at $75 billion .

Under the proposed framework, users who stake WLFI tokens would gain “additional benefits for USD1 usage.” Specifically, USD1 deposits made on WLFI Markets—the protocol’s trading and lending platform—would attract unspecified incentives from the DeFi protocol Dolomite.

By tying stablecoin access and liquidity privileges to governance participation, WLFI aims to strengthen USD1 adoption following its launch through previous rewards programs and partnerships with institutional platforms and other protocols.

Implementation Timeline and Voting Requirements

For the governance vote to be valid, the WLFI team has set a participation threshold requiring at least one billion voting tokens, with a simple majority in favor required for passage. According to CoinGecko, over 27 billion WLFI tokens are currently in circulation.

If approved, the rollout would proceed in three phases:

• Phase 1: Implementation of staking rewards and USD1 deposit incentives

• Phase 2: Activation of the 1:1 conversion feature for Nodes and Super Nodes

• Phase 3: Partnership access and establishment of a revenue-sharing framework for Super Nodes

The proposal is expected to move through WLFI’s formal governance process, where token holders will vote on whether to adopt the new framework. If approved, further technical and operational details would be released alongside formal implementation timelines.

Historical Context and Implementation Considerations

The proposal arrives amid historical context regarding token access challenges. Some WLFI token holders previously experienced extended lock-ups and delays in accessing their holdings, attributed at the time to operational and structural constraints rather than technical failures.

While the current proposal does not directly address those past issues, they form part of the backdrop against which governance reforms are now being introduced. The market’s response is likely to hinge not only on the proposal’s design but also on how smoothly it is implemented in practice.

Observers note that the success of the governance reset will depend on execution following past operational delays, with implementation transparency emerging as a key factor in stakeholder confidence.

FAQ: Understanding WLFI’s Governance Proposal

Q: What are the key requirements for WLFI token holders to participate in governance?

A: Token holders would need to stake their WLFI tokens for a minimum lock-up period of 180 days to vote on governance matters. Voting power is weighted by both the amount staked and the remaining time in the lock-up. Stakers who participate in at least two governance votes during the lock-up would earn approximately 2% annual rewards.

Q: What benefits do “Nodes” and “Super Nodes” receive under the proposal?

A: Nodes (holders with at least 10 million WLFI tokens) and Super Nodes (holders with more than 50 million tokens) gain access to exclusive features including 1:1 conversion of other stablecoins into USD1 and the ability to provide direct off-ramps to fiat currency. Super Nodes would additionally participate in a revenue-sharing framework.

Q: How does the proposal aim to increase USD1 adoption?

A: The proposal ties USD1 incentives to governance participation, with stakers receiving enhanced benefits for USD1 deposits on WLFI Markets through incentives from Dolomite. It also creates privileged distribution channels through Nodes and Super Nodes who can facilitate stablecoin conversions and fiat off-ramping.

Q: What is USD1’s current market position among stablecoins?

A: USD1 is the fifth-largest stablecoin by market capitalization at $4.7 billion, according to DefiLlama. The total stablecoin market stands at over $309 billion, with USDT dominating at $183 billion (59% market share) followed by USDC at $75 billion.