🔴 Update: Trump’s $WLFI $WLFI token has plunged 12%, hitting record lows after World Liberty Financial justified borrowing $75M in stablecoins using its own governance token as collateral on Dolomite.
🔸Mechanics: WLFI staked its token, borrowed stablecoins against it, and emptied Dolomite’s USD1 pool, leaving other depositors locked out of withdrawals.
🔸Defense: The project argued that even in sharp market downturns, it could “simply add more collateral.” That collateral, however, is more WLFI itself.
🔸Positioning: WLFI acknowledged the transactions, portraying itself as an “anchor borrower” that supposedly generates yield for others.
🔸Numbers: WLFI now trades about 48% below its six‑month average buyback price of $0.1507. Over that period, the project spent $65.58M on 435.3M tokens in open market purchases.
🔸Problem: As WLFI’s price falls, each token supports less borrowing power. That forces the protocol to pledge more WLFI, deepening exposure to a declining asset and making it harder for depositors to exit.
