Proposal Summary
To address the fiscal disruptions caused by a potential U.S. government shutdown, World Liberty Financial (WLFI) proposes an emergency liquidity bridge using USD1, our U.S. dollar-pegged stablecoin. This initiative will provide up to $500 million in short-term, low-risk loans to fund critical federal operations (e.g., Social Security, military salaries, FEMA) during a shutdown, collateralized by U.S. Treasury assets.
To empower our community, ~85,000 original presale participants will each receive an airdrop of 350,000 WLFI tokens, auto-staked in a yield-generating pool to support the USD1 loans. Participants will earn 2-5% annual interest (APY) in USD1. Upon loan repayment, the returned USD1 principal will be used to buy WLFI on the open market, with 80-90% of those tokens burned to reduce circulating supply, creating a deflationary effect. The remaining 10-20% will fund protocol development. This aligns with WLFI’s mission to innovate DeFi while supporting America’s financial stability.
We seek governance approval to deploy $500 million in USD1 from protocol reserves, with full transparency via on-chain attestations.
Background
U.S. government shutdowns, as seen in 2024 and looming in 2025 due to debt ceiling disputes, disrupt $100+ billion in monthly payments and furlough 2 million workers, per CBO estimates. Traditional financing is often stalled by political gridlock. WLFI, launched in 2024 with USD1 introduced in March 2025, is backed 1:1 by U.S. Treasuries and cash equivalents, custodied by BitGo. With $550 million raised from 80,000+ presale participants, and a 99% approval rate for our recent POL fee buyback-and-burn proposal, WLFI is poised to bridge this gap with DeFi innovation.
Proposal Details
- Airdrop and Auto-Staking Mechanism
- Eligibility: ~85,000 verified presale participants (per October 2024-March 2025 KYC records).
- Allocation: 350,000 WLFI per wallet (~29.75 billion WLFI total, <30% of 100 billion supply, sourced from treasury).
- Auto-Stake: Tokens auto-stake via the WLFI App (live September 2025) into an Ethereum/Aave V3 yield pool.
- Staking APR: 4-8%, driven by POL fees and USD1 lending yields.
- Unstaking: 7-day cooldown; emergency overrides for verified hardship.
- Purpose: Staked WLFI generates yields to bolster USD1 loan capacity and incentivize participation.
- USD1 Loan Deployment to Government
- Loan Structure: Up to $500 million in USD1 as 30-90 day loans to a Treasury-designated entity (e.g., Exchange Stabilization Fund).
- Collateral: 150% over-collateralized by short-term U.S. T-bills.
- Interest Rate: 1-2% annualized, below T-bill yields, as a public service.
- Use Case: Instant on-chain funding for furlough payments, IRS refunds, and disaster response.
- Risk Controls:
- Chainlink oracles for peg and collateral monitoring; auto-liquidation below 120%.
- 10% of fees to Nexus Mutual insurance pool.
- Repayment triggers USD1 distribution to stakers and WLFI buyback.
- Rewards and Buyback-Burn Mechanics
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Holder Returns: Stakers earn 10-20% of loan interest in USD1 (~$1-2 million annually at scale), distributed weekly.
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Deflationary Buyback and Burn:
- Upon loan repayment, 80-90% of returned USD1 principal is used to buy WLFI on decentralized exchanges (e.g., Uniswap).
- Purchased WLFI is burned permanently, reducing circulating supply.
- Remaining 10-20% of USD1 funds protocol growth (e.g., USD1 cross-chain expansion).
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Projected Impact:
Metric Short-Term (Shutdown Phase) Long-Term (Post-Repayment) Total WLFI Airdropped 29.75B N/A Est. WLFI Burned (at $0.15/WLFI) N/A 20-25B (~$3-3.75B value) Holder APY 2-5% 4-8% (sustained) Circulating Supply Reduction Minimal 20-25%
This buyback-and-burn aligns with our POL fee model, enhancing WLFI scarcity.
- Implementation Timeline
- Week 1: Governance vote; airdrop claims open.
- Week 2-4: Staking live; USD1 loans deployed upon shutdown trigger.
- Ongoing: Monthly on-chain treasury reports at governance.worldlibertyfinancial.com.
Benefits and Risks
Benefits
- National Impact: Prevents $10B+ daily shutdown losses; strengthens USD1 as a leading stablecoin.
- Holder Value: Airdrop and yields reward early adopters; buyback-burn drives WLFI price growth (11% weekly as of October 2025).
- DeFi Leadership: Tests sovereign lending, setting a precedent for global DeFi applications.
- Transparency: On-chain execution ensures accountability.
Risks and Mitigations
- Regulatory Risk: SEC/OFAC scrutiny. Mitigation: Structure as private placement; legal review by Perkins Coie.
- Default Risk: Minimal (U.S. credit-backed). Mitigation: Cap at 10% of USD1 reserves; over-collateralization.
- Market Risk: WLFI volatility post-airdrop. Mitigation: Vesting (20% immediate, rest over 6 months); burns offset supply.
- Adoption Risk: Government integration delays. Mitigation: Leverage WLFI advisors for Treasury talks.
Call to Action
WLFI community: Let’s rally to support America with DeFi. Vote YES to launch the USD1 Emergency Bridge, claim your 350,000 WLFI, and join the deflationary revolution. Discuss on the forum and stake via LobbyFi.
