Key Highlights
- WLFI staked 5B tokens worth $440M on Dolomite and borrowed $150M in stablecoins.
- The project now holds over 50% of Dolomite’s supply, with $40M+ moved to Coinbase Prime.
- Team calls concerns “FUD” — critics say a price drop could trigger a messy liquidation.
- WLFI claims $159.5M in annualized USD1 revenue and spent $6.5M buying back 43.5M tokens to support the price.
World Liberty Financial, the Trump family-linked crypto venture, has pushed back firmly against growing concerns over its aggressive borrowing on the DeFi platform Dolomite, labeling market warnings as “FUD.”
On-chain data reveals the project supplied roughly 5 billion WLFI governance tokens—valued near $440 million at current prices—as collateral across wallets on Dolomite. Against this, the team borrowed a total of $150 million in USDC, alongside additional stablecoins including its own USD1.
Over $40 million of the borrowed funds were subsequently moved to Coinbase Prime. The move has driven WLFI’s share of supplied assets on Dolomite above 50%, with certain stablecoin pools approaching full utilization and spiking borrow rates.
Given WLFI’s relatively thin liquidity and recent price weakness, a further drop could complicate unwinding the large collateral position, potentially exposing lenders to losses. Critics describe the strategy as high-risk looping that amplifies leverage while masking downside exposure.
Earlier today, WLFI rejected the concerns outright, with it highlighting the $159.5 million in annualized revenue from its USD1 stablecoin and $6.558 million spent repurchasing 43.5 million WLFI tokens to support the market. A governance proposal to adjust early unlocks is also underway.
The episode underscores ongoing DeFi debates around self-referential leverage and concentration risk in low-depth assets. As WLFI acts as both major supplier and borrower, Dolomite’s health is now closely tied to the project’s token management.
Also read: From Panic to Quick Fixes: StarkWare Makes Bitcoin Quantum-Resistant
