Por Lockridge Okoth
10 October 2024, 10:45 GMT+0000
Translated by
Eduardo Venegas
10 October 2024, 18:05
IN SUMMARY
World Liberty Financial plans to launch its DeFi venture on Aave's Ethereum mainnet via a governance proposal.
WLFI seeks to promote mass adoption of DeFi through Aave decentralized lending by offering new lending features.
Skepticism surrounds WLFI’s unclear business model, but the integration with Aave could address some investor concerns.
Donald Trump’s decentralized finance (DeFi) company, World Liberty Financial, is aiming to launch on Aave’s Ethereum mainnet. This collaboration seeks to establish a platform that will set new standards and advance the entire DeFi sector.
World Liberty Financial was officially launched on September 18 to much attention. However, questions remain regarding WLFI’s unclear business model and tokenomics.
Trump to bring WLFI to Aave's Ethereum mainnet
In a recent governance proposal, World Liberty Financial (WLFI) revealed its intention to launch on Aave v3. According to the proposal, this would allow the DeFi firm to provide liquidity for Ethereum, wrapped Bitcoin, and stablecoins.
Trump’s WLFI venture also aims to leverage its marketing efforts to promote DeFi to a broader audience. This includes a new class of users to overcollateralize loans and borrowing.
It will leverage Aave’s clout as a market leader in decentralized lending to offer seamless user experiences for supplying and borrowing against digital assets. The DeFi firm will use the same reserve factor system as the main Aave instance.
Similarly, the Aave DAO will receive 20% of the protocol fees generated by World Liberty Financial’s Aave v3 instance. These plans suggest a symbiotic relationship between the World Liberty Financial and Aave protocols.
This integration could increase the user base of the Aave protocol. The Aave DAO will also receive around 7% of the total supply of WLFI tokens. The token’s use cases range from governance and liquidity mining to promoting the decentralization of the WLF platform.
Additionally, a revenue split would be established using a trustless smart contract. World Liberty Financial also plans to bring assets that would otherwise be incompatible with the mainstream market onto the Ethereum mainnet.
To do this, it will leverage its ties to traditional finance (TradFi) and institutional investment. Whether all of this will materialize depends on the governance of the Aave DAO and the approval of the WLFI community. The intention to integrate with Aave was first demonstrated in early September, two weeks before the DeFi company's official debut.
