Trump-Backed World Liberty Financial Uses 5 Billion WLFI Tokens to Borrow $75 Million on DeFi Platform

World Liberty Financial, backed by President Donald Trump and his sons, borrowed $75 million in USDC stablecoins from DeFi protocol Dolomite by depositing 5 billion WLFI tokens as collateral, representing 98% of the token's supply on the platform. The transaction pushed Dolomite's lending pool to 100% utilization and triggered a 12% price drop in WLFI to around $0.08, reducing its market cap by $427 million to $2.58 billion. The move raises conflict of interest questions as Dolomite co-founder Corey Caplan also serves as a World Liberty Financial advisor. Around 75% of WLFI's supply remains locked and non-transferable, though the company is drafting a governance proposal to allow token holders to vote on unlocking with a long-term vesting schedule.

WLFI Token Price Collapse and Market Cap Loss

• ▪WLFI's market cap tumbled $427 million to $2.58 billion from nearly $3 billion
• ▪WLFI decreased 14% in price over a 24-hour period
• ▪World Liberty Financial's governance token WLFI changed hands around $0.08 on Friday

DeFi Borrowing Strategy and Liquidation Concerns

• ▪World Liberty Financial posted around $400 million worth of WLFI as collateral on Dolomite across two wallets
• ▪World Liberty Financial's WLFI collateral represented roughly 98% of the token's supply on Dolomite
• ▪World Liberty Financial borrowed $150 million in stablecoin loans from Dolomite

Token Unlock Proposal for Early Holders

• ▪20% of WLFI's total supply has been allocated via public sales, worth $2 billion on paper
• ▪World Liberty Financial raised $550 million across 85,000 participants through two sets of WLFI sales as of March 2026
• ▪Around 75% of WLFI's supply remains locked, preventing investors from trading the token

Perspective of DeFi critics and skeptics

• ▪World Liberty Financial's use of 98% of WLFI supply on Dolomite as collateral demonstrates concentration risk in decentralized finance lending pools
• ▪The 12% WLFI token price drop following the $75 million borrowing suggests the transaction negatively impacted token holders

Perspective of WLFI token investors

• ▪WLFI investors cannot trade their tokens due to the non-transferable status and 75% supply lock affecting market liquidity
• ▪The $427 million market cap decline represents significant paper losses for WLFI token holders who participated in the $550 million fundraise