World Liberty Financial (WLFI), the cryptocurrency venture backed by the Trump family, has submitted a major governance proposal aimed at fundamentally restructuring how value is captured and distributed within its ecosystem. The core of the proposal is the WLFI Governance Staking System, designed to redirect millions of dollars in arbitrage profits—previously captured by institutional intermediaries—toward long-term WLFI token holders.
The proposal opens with a candid admission: during the recent expansion of its stablecoin, USD1, market makers captured millions in arbitrage profits, running approximately 15 basis points per minting and selling cycle. Simultaneously, the protocol paid millions in additional subsidies to facilitate redemptions. In net terms, significant value flowed out of the protocol to a small group of intermediaries.
The new system presents a multi-tiered governance and reward structure:
Basic Governance Staking: Holders of unlocked WLFI tokens who wish to participate in governance must now lock their assets for a minimum of 180 days. This requirement is intended to ensure "voting power is held by participants with long-term alignment to the protocol." Voting power is calculated using a square root weighting formula that accounts for both the amount staked and the remaining lock-up time. Stakers who participate in at least two governance votes during their lock-up period earn a base reward targeting an approximate 2% annual yield in WLFI. Passive stakers receive no rewards.
Node and Super Node Tiers: The proposal introduces two advanced tiers. To become a Node, a participant must stake a minimum of 10 million WLFI tokens (approx. $1 million). Super Node status requires 50 million WLFI tokens (approx. $5 million).
Nodes gain access to the core arbitrage redistribution mechanism. Through partnerships with licensed market makers, they can convert other stablecoins like USDT and USDC to USD1 at a 1:1 parity and access direct off-ramps to fiat currency. The protocol will subsidize market makers to maintain this parity, effectively transferring the 10-15 basis points per cycle that previously went to external institutions to Nodes. The first 1,000 Nodes will also receive additional rewards based on conversion volume, settled every six months.
Super Nodes receive all Node benefits plus guaranteed direct access to the World Liberty Financial team for commercial partnership discussions, acting as a filter for serious, aligned counterparties.
For the proposal to pass, a quorum of one billion eligible tokens must participate in a seven-day voting period, with a simple majority required. If approved, implementation will occur in three phases: first activating basic staking and governance rewards, then launching the Node structure with conversion rights, and finally activating the Super Node framework with partnership access.
The proposal represents a strategic shift to use governance tiers to redistribute a pre-existing, quantifiable value flow—the USD1 arbitrage—rather than creating artificial incentives. With USD1 currently ranked as the fifth-largest stablecoin with a market cap of $4.7 billion, this move aims to create structural demand pressure and a more stable, committed holder base by providing concrete economic reasons for long-term participation.
