US EditionTrump-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.
23 Articles
23 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.
Trump-linked WLFI hits new low as token-backed loan sparks concern
WLFI, the native token of World Liberty Financial—the Donald Trump–backed platform—took a deeper slide over the weekend as new on-chain disclosures raised questions about the project’s use of its own tokens as loan collateral. Trading near $0.078, WLFI marked an all-time low after sinking roughly 83% from its September peak around $0.46, according to data tracked by CoinMarketCap. The fresh selloff followed revelations that wallets tied to World…
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