The World Liberty Financial (WLF) crypto project, connected to Donald Trump, had grand ambitions. Its goal was to "shake up the crypto world with something HUGE." However, reality fell far short of these expectations.
Unsuccessful Token Sale
Instead of filling its treasury with large investments, the project failed to come close to its sales targets. WLF aimed to raise $300 million by selling 20% of its tokens, with a total valuation of $1.5 billion. Instead, it managed to collect only $13.5 million, which is less than 5% of its goal.
Controversial Project Terms
It's not hard to understand why investors remained cautious. In a recently published 13-page "golden paper," the project revealed that DT Marks DEFI LLC, linked to the Trump family, has the right to 75% of the net proceeds from the protocol and would receive WLFI tokens worth $337.5 million. This raised doubts even among the project's most loyal supporters.
Investor Distrust
Jehan Chu, co-founder and managing partner of Kenetic Capital, stated that these conditions left a negative impression even on seasoned investors, who see the project as unattractive from an investment perspective. Similarly, Yat Siu, co-founder of Animoca Brands, shared a similar opinion, calling the project a "money grab," adding that the Trump family has yet to demonstrate a genuine understanding of the spirit and ethos of Web3, which is largely about sharing network effects and building community.
Sale Restrictions and Founder Issues
Another issue was the restriction on WLFI token sales to accredited U.S. investors only, excluding smaller, everyday investors from participating. In addition to this limitation, investors were also concerned about the past of two of WLF's five co-founders, Chase Herro and Zak Folkman. These two had previously co-founded Dough Finance, a DeFi project that lost $2 million in a hack this July, and were reportedly involved in several lawsuits across the United States.
Tokenomics and Technological Shortcomings
Weak tokenomics and the founders' controversial history were not the only concerns. WLF plans to launch an Aave v3 platform on the Ethereum network, offering liquidity for ether, wrapped bitcoin, and stablecoins, with plans to expand to Layer 2 Scroll. According to Joe McCann, founder of Asymmetric Financial, this is "just another lending/borrowing app that was innovative five years ago."
Moreover, the project's "golden paper" states that WLFI tokens will be non-transferable for at least one year, raising liquidity concerns.
Technical Issues During the Token Sale
Technical problems during the token sale further complicated matters. The project's website crashed for an extended period due to insufficient automatic scaling.
An Uncertain Future for the Project
Even though the total token sale figure of $13.5 million may not be finalâsince some buyers may have purchased directly through the teamâit's clear that the project got off to a bad start. World Liberty Financial is expected to face a tough road ahead in reaching its goals.
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