World Liberty Financial introduces a staking system and USD1 incentives to boost long-term engagement and governance alignment.
Background on World Liberty Financial
World Liberty Financial (WLFI), backed by the Trump family, has proposed new governance measures aimed at increasing participation and ensuring long-term alignment with its protocols. These initiatives include a staking system to enhance voting power and incentives for using their stablecoin USD1.
Staking System and Voting Power
To ensure that governance votes are influenced by participants committed to WLFI's protocol, the team has suggested requiring token holders to stake their tokens for at least 180 days. This measure is designed to exclude short-term holders or speculators from wielding significant voting power. Stakers will earn an annual percentage rate of 2% if they participate in at least two governance votes during this lock-up period. The amount and duration of staked tokens determine the voter's governance power.
USD1 Adoption Incentives
In addition to enhancing the staking system, WLFI is also focusing on increasing the adoption of its stablecoin USD1 through various incentives. Since launching the token, the team has been offering rewards programs and collaborating with institutional platforms and other protocols. As part of this proposal, users who stake their tokens will gain additional benefits for USD1 usage. For instance, deposits made on WLFI Markets will attract unspecified "incentives" from DeFi protocol Dolomite.
Node Access Benefits
Nodes, defined as holders with at least 10 million WLFI tokens, and Super Nodes, those holding more than 50 million WLFI tokens, will gain exclusive access to providers who can convert other stablecoins like USDC (USDC) and USDt (USDT) into USD1 on a 1:1 basis. This feature offers an off-ramp directly to fiat for these large token holders.
Governance Proposal Details
For the proposal to be valid, WLFI has set a threshold of one billion voting tokens participating with a majority vote required for approval. Currently, over 27 billion WLFI tokens are in circulation according to CoinGecko. If approved, the rollout will occur in three phases: initial staking rewards and USD1 deposit incentives, followed by the 1:1 conversion feature, and finally partnerships and revenue-sharing frameworks for Super Nodes.
Stablecoin Market Landscape
The stablecoin market is currently dominated by USDC and USDT. As of Thursday, the total market capitalization for stablecoins exceeded $309 billion according to DeFi aggregator DefiLlama. USDT holds the largest market cap with over $183 billion, followed closely by USDC at $75 billion. WLFI's USD1 ranks as the fifth-largest stablecoin, with a market cap of $4.7 billion.
This strategic move by World Liberty Financial aims to solidify its position within the growing stablecoin landscape and enhance long-term engagement among token holders.
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