Trump-backed WLFI token drops 12% to record lows after team defends multi-million lending position
The borrowing drained Dolomite’s USD1 pool and left ordinary depositors facing withdrawal delays as WLFI said the move was intentional.
- On Friday, World Liberty Financial defended its lending strategy on the Dolomite DeFi platform, asserting it is an "anchor borrower" that generates yield for other users after reports revealed the venture used its own governance token as collateral.
- The Trump-linked crypto venture pledged five billion WLFI tokens on the protocol, which is advised by Dolomite co-founder Corey Caplan, to borrow $75 million in stablecoins, raising structural conflict-of-interest concerns.
- Utilization of the Dolomite USD1 pool surged to roughly 93%, hindering withdrawals for ordinary depositors, while WLFI borrowed 65.4 million USD1 and 10.3 million USDC, though $15 million was subsequently repaid.
- Following the disclosures, WLFI token prices fell about 12% to their lowest level since the 2025 launch, while treasury buybacks are now roughly 48% underwater despite the venture posting on X it is "nowhere near liquidation."
- Critics warn the strategy deepens a circular risk loop, as falling WLFI prices erode borrowing power and concentrate collateral, while the treasury holds an additional three billion tokens worth roughly $234 million.
25 Articles
25 Articles
Trump-backed WLFI token drops 12% to record lows after team defends multi-million lending position
World Liberty Financial responded to CoinDesk's reporting by saying it would "simply supply more collateral" if markets moved against it, a statement that did not reassure holders.
World Liberty Financial Borrows $75 Million Against Its Own Token on a Protocol Its Advisor Co-Founded
World Liberty Financial pledged billions of its own WLFI tokens on Dolomite — a protocol co-founded by a WLFI advisor — to borrow $75 million in stablecoins, locking out ordinary depositors in the process.
WLFI Plunges to Record Low — Market Sentiment Turns Sour
WLFI dropped 12% after heavy selling and collateral borrowing concerns emerged. On-chain activity and liquidity stress raised fears about protocol stability and withdrawals. Technical indicators show bearish momentum with key support levels under pressure. World Liberty Financial — WLFI, came under heavy selling pressure as market confidence weakened sharply across trading sessions. The asset dropped nearly 12% within 24 hours, pushing price to …
Is Trump Backed a WLFI In Trouble? 5B Self-Collateral, $75M Borrowing Stirs Controversy
World Liberty Financial (WLFI), a crypto project associated with the Donald Trump family, is involved in an escalating controversy. The team pledged approximately 5 billion of its own tokens to borrow approximately $75 million in stablecoins. Crypto critics say that this structure resembles circular financing. Onchain data indicates that WLFI transacted with self issued assets The post Is Trump Backed a WLFI In Trouble? 5B Self-Collateral, $75M …
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