Preface


World Liberty Financial (WLFI), a decentralized finance project associated with Donald Trump, announced that its public sale will launch on Tuesday (October 15), aiming to raise $300 million at a valuation of $1.5 billion. The Trump family’s involvement has brought a lot of attention to WLFI, but it has also raised concerns about whether the project has political overtones.


WLFI co-founder Zak Folkman recently revealed that more than 100,000 people have registered since the whitelist registration was opened on September 30. Paxos announced that its co-founder Rich Teo has joined the WLFI team to be responsible for stablecoin and payment business.


World Liberty Financial 


Former US President Donald Trump is about to launch a cryptocurrency project called World Liberty Financial (WLFI). Trump has always been supportive of cryptocurrencies and promised to fire Gary Gensler, chairman of the US Securities and Exchange Commission (SEC), set up a cryptocurrency advisory committee, and formulate clear industry regulatory rules during his presidency.


Specifically, WLFI is operated by his sons Donald Trump Jr. and Eric Trump. The project provides cryptocurrency lending and investment services through a decentralized platform and is only open to US investors who meet KYC requirements.


While Trump's supporters welcomed the project as a sign of his attention and support for cryptocurrencies, the cryptocurrency community has questioned the transparency and decentralization of the project. Prominent figures in the cryptocurrency space, such as Dogecoin founder Billy Marcus, have criticized the project, arguing that it could affect Trump's political ambitions.


WLFI's initial plans include launching a DeFi lending platform on Ethereum's second-layer solution "Scroll", supporting transactions in Bitcoin, Ethereum, and stablecoins. The lending platform is modeled after Aave, and 7% of the token supply will be allocated to Aave DAO to promote governance participation and liquidity provision. Future plans also include the development of stablecoin-centric credit cards, integration with cryptocurrency exchanges, and decentralized ownership of real-world assets such as hotels and clubs through the platform. WLFI aims to help the United States maintain its leading position in the global cryptocurrency field by promoting the large-scale application of stablecoins.


However, the market has concerns about the security of the project because Zachary Folkman and Chase Hero, two leaders of the WLFI project, had previously participated in the "Dough Finance" platform, which was hacked in July 2023 and lost more than $2 million. Since WLFI used similar code to Dough Finance, the security of the project was questioned.


The Dough Finance protocol is based on Aave V3 and provides solutions for lending, asset management, and yield maximization. Features include automated DeFi Smart Accounts (DSA), a yield multiplier mechanism, and governance through the DOUGH token. However, the platform's design also has some limitations, such as high borrowing fees, permanent lock-up of pre-sale tokens, a centralized governance structure, and strict liquidation thresholds, which may limit the participation of some users.


WLFI Token Sale


The WLFI token sale is scheduled for October 15, 2024, open only to whitelisted users, with the goal of raising $300 million, or 20% of the total WLFI supply. The fully diluted valuation of the project reaches $1.5 billion. Of the total token supply allocation, 63% is for public sales, 17% for user rewards, and 20% is allocated to the founding team, advisors, and future employees, including WLF Foundation and Trump Organization affiliates.


The sale of WLFI tokens is being conducted under the SEC’s Regulation D, specifically Rule 506(c), which permits the sale of unregistered securities to accredited investors in the U.S. This means that only accredited investors can participate in the token sale, which could limit participation by the general public.


Although WLFI's governance tokens give holders voting rights, the large number of tokens concentrated in the hands of the team and giants makes it not fully meet the standards of traditional decentralized crypto projects.


summary


The WLFI project has obvious political overtones, such as its claim to "help the United States maintain its leading position in the global cryptocurrency field." Before the election, the project received widespread support from the crypto industry. The investment value of WLFI depends not only on the development of the project itself, but also on Trump's political fate. If the election results are favorable to Trump, the related MEME tokens and WLFI tokens are likely to achieve explosive growth.


However, investors should also remain cautious. During the Space live broadcast on the evening of October 14, participants had different opinions on the prospects of the WLFI project. Some people are optimistic about the project's innovativeness and potential market value, but others have questioned the team background, token distribution, technical implementation and regulatory compliance. Specifically, the past experience of team members, the imbalance of token distribution, technical uncertainties, and changes in U.S. cryptocurrency regulatory policies are all potential risks that the project may face.