World Liberty Financial, the decentralized finance (DeFi) project behind the USD1 stablecoin, has submitted a high-profile governance proposal to use a portion of its unlocked treasury to accelerate adoption of its flagship dollar-pegged digital asset.
The initiative, introduced to the WLFI community in late December 2025, aims to deploy a small percentage of the project’s token reserves as incentives for strategic partnerships and ecosystem growth.
Under the terms of the proposal, World Liberty Financial would allocate less than 5 % of its unlocked WLFI governance token treasury toward programs designed to expand the real-world usage of USD1.
Based on the current size of the treasury, roughly 19.96 billion, WLFI tokens are valued at nearly $2.4 billion.
This allocation represents approximately $120 million earmarked for incentive initiatives spanning both centralized finance (CeFi) and decentralized finance (DeFi) partners.
Strategic Push in a Crowded Stablecoin Market
USD1, which launched earlier in 2025, is a U.S. dollar-pegged stablecoin backed by reserves that include U.S. Treasury bills, cash deposits, and other cash equivalents.
It has grown rapidly since its inception, with a market capitalization estimated in the billions and ranking among the top global stablecoins.
Recent integrations on major exchanges and blockchain networks have helped embed USD1 across multiple markets.
World Liberty’s proposal frames the treasury deployment as a proactive “growth accelerator” in a stablecoin ecosystem that has become increasingly competitive.
By offering incentives such as liquidity mining, yield programs, and partner rewards, the team believes USD1 can gain broader traction with users, institutional platforms, wallets, and other financial infrastructure providers.
The hope is that increasing the circulation and utility of USD1 will not only boost adoption of the stablecoin itself but also create a reinforcing cycle of engagement that benefits the wider WLFI ecosystem.
“As USD1 grows, more users, platforms, institutions, and chains integrate with World Liberty Financial infrastructure,” the proposal states.
This highlights the positive network effects that enhanced adoption could unlock for the entire ecosystem.
More News: Trump-Backed World Liberty Financial to Launch Debit Card
Governance Vote and Community Reaction
The proposal is now live on the WLFI governance forum, where token holders are casting votes to determine whether the treasury allocation should be approved.
However, early results show significant opposition. As of late December 2025, more than 67% of participating voters were against the measure.
Critics argue that deploying treasury assets at this stage could be premature, potentially reducing long-term reserve strength or exposing the project to added risk.
Some opponents also express concern about regulatory and economic uncertainties facing stablecoins in general.
Stringent oversight under frameworks such as the U.S. GENIUS Act and the EU’s MiCA rules have placed emphasis on strong reserve backing and compliance, meaning expanded stablecoin issuance could attract additional scrutiny from regulators.
Supporters of the proposal say USD1 needs more than just good intentions to stand out in a market where giants like USDT and USDC already rule.
They believe it takes real incentives, smart investment, and a push for better liquidity.
Getting USD1 listed on more platforms and woven into more financial systems is essential if the project wants to grow past its current users.
Broader Ecosystem Developments
The proposal comes amid a period of rapid expansion for USD1.
Beyond the treasury debate, World Liberty Financial has been pursuing multiple partnerships and integrations to strengthen the stablecoin’s market reach.
For example, integration with major payment gateways and collaborations with blockchain projects aim to deepen USD1’s utility across borders and financial services.
This broader adoption strategy aligns with World Liberty’s positioning of USD1 as a regulated, compliant stablecoin that appeals to both retail and institutional users.
This is a segment of the crypto market that continues to attract significant interest despite ongoing macroeconomic uncertainties.
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