Summary
This proposal directs 75% of all yield, interest, or gains generated from WLFI’s stablecoin reserves (USD1) to be used for buying WLFI on the open market and permanently burning it. The remaining 25% of yield will be retained by the protocol for operations and sustainability.
Only yield generated from WLFI-controlled reserves (e.g., USD1 minted and the reserves deployed into TradFi instruments such as government bonds or similar low-risk assets) is included.
Why This Matters
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Direct supply reduction: Real yield from external assets (bonds, interest, etc.) is converted into WLFI buybacks and burns.
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Sustainable value loop: The larger the USD1 reserve base, the greater the yield, and the greater the WLFI burn pressure.
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Holder alignment: Long-term WLFI holders benefit from steady supply contraction funded by external cash flows.
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Operational balance: Keeping 25% of yield ensures the protocol remains well-capitalized and sustainable.
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Transparency: Burns are executed on-chain with reports shared publicly.
How It Works
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USD1 stablecoins are minted using collateral.
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That collateral is deployed into TradFi yield-generating instruments (e.g., bonds, interest-bearing accounts).
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Yield is split:
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75% → used to buy WLFI tokens on the open market.
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Purchased tokens → permanently burned.
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25% → retained by the protocol treasury.
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Alternatives Considered
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Retaining 100% of yield in Treasury for growth.
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Splitting 50/50 between burn and Treasury.
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Burning 100% of yield.
We believe a 75/25 split maximizes impact while ensuring sustainability.
Voting Options
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FOR: Allocate 75% of WLFI’s USD1 reserve yield to WLFI buyback & burn, with 25% retained.
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AGAINST: Retain all yield in Treasury.
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ABSTAIN: No preference.
Future Expansion
If passed, this framework will serve as the foundation of a real-yield driven WLFI buyback and burn strategy. Over time, the community can consider increasing the percentage allocated to burns, or expanding the program to other yield-bearing sources of protocol revenue.