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World Liberty Financial – the blockchain-based project benefiting President Donald Trump, U.S. Special Envoy to the Middle East Steve Witkoff, and their families – is declaring war on the "FUD" surrounding its immense WLFI borrow positions.
What's the Scoop?
- Big Borrows: The World Liberty Financial team successfully monetized its holdings of the WLFI governance token via lending markets, borrowing at least $50M of net stablecoins against 5B of its own tokens through lending marketplace Dolomite since February.
- Just Add More Tokens: While many within the crypto industry have voiced concerns about the sizable borrow position and potential contagion effects for lenders, noting that a WLFI liquidation could not possibly be processed without material bad debt, World Liberty Financial has rejected such concerns as FUD. Posting to X, the team said its borrow position is, "nowhere near liquidation — and frankly, even if markets moved dramatically against us, we'd simply supply more collateral."
- Incentivized Yield: To encourage crypto users to lend money against WLFI tokens, the team has applied portion of its WLFI stack as incentives for lenders, boosting yields well in excess of market to offer 10% on stablecoins at the time of writing.
What's the Take?
While the WLFI team summarily dismissed the crypto industry's concerns as “FUD," telling lenders to trust that more collateral will appear, this situation appears increasingly fragile for those putting their faith in POTUS.
