On-chain data shows that World Liberty Financial (WLFI) borrowed $75 million in stablecoins on the Dolomite lending platform, using 5 billion WLFI tokens as collateral, and transferred over $40 million of those funds to Coinbase Prime. This caused the lending pool to reach 100% utilization, preventing depositors from withdrawing their funds. The WLFI token price dropped nearly 10%, hitting a new all-time low. Although the nominal value of the collateral is approximately $440 million, forced liquidations may further depress the token price, raising concerns about the circular economy and the use of user funds.
Trump-backed WLFI borrows $75 million in stablecoins, raising concerns
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Summary
World Liberty Financial (WLFI) borrowed $75 million in stablecoins through Dolomite, pledging 5 billion tokens as collateral. Over $40 million was transferred to Coinbase Prime, causing the lending pool to reach full utilization and halting withdrawals. The token price dropped nearly 10% to a new low, with collateral assets valued at approximately $440 million. Concerns over the project’s economic model and recent news regarding real-world assets (RWA) have intensified, as forced liquidations could further depress the price. While new token listings often experience volatility, this development raises fresh concerns about the safety of user funds.
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