Trump’s World Liberty Financial borrows against its crypto token
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The Trump family's World Liberty Financial crypto project has borrowed $75 million in stablecoins using its own WLFI governance tokens as collateral, prompting criticism and comparisons to the collapse of crypto exchange FTX. The project's treasury now accounts for roughly 55% of the total value locked on the DeFi lending platform Dolomite, raising concerns about potential liquidations and bad debt.
World Liberty Financial, a crypto project linked to the Trump family, has borrowed $75 million in stablecoins. The project used its own WLFI governance tokens as collateral on the DeFi lending platform Dolomite. This has raised concerns due to the concentration of World Liberty Financial's treasury on the platform, which now accounts for roughly 55% of the total value locked. A drop in the WLFI token's price could trigger large liquidations, harming other depositors. The situation is being compared to the collapse of crypto exchange FTX in 2022. World Liberty Financial has responded to criticism, dismissing concerns as 'FUD' and stating that it remains 'nowhere near liquidation'.
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