Author: Weilin, PANews
As of 2 p.m. on October 18, the token WLFI of Trump's DeFi project World Liberty Financial had sold a total of about 870 million WLFI, equivalent to about US$13.06 million, far less than the expected 20 billion, which is about US$300 million based on the pre-sale price.
Due to the high qualification threshold for WLFI buyers and the non-transferability of tokens, the WLFI issuance volume was far less than expected. This DeFi project was also criticized for its lack of innovation, like a "meme disguised as a practical project", and was complained by some crypto entrepreneurs and executives.
Nevertheless, with less than three weeks to go before the U.S. presidential election, Trump's support in the prediction market has seen a major reversal, hitting a new high of 62.5%. Compared to Harris' recent ambiguity on crypto policy, Trump has already seized a lot of opportunities and resources in the crypto community.
WLFI has a high purchase threshold and is not transferable, and the sales volume is far below expectations
WLFI tokens were sold from October 15th. About three days later, only 4.3% of the total tokens were sold. As of 2:00 pm on October 18th, a total of about 870 million WLFI tokens were sold, which is about 13.06 million US dollars at the pre-sale price of $0.015 per token. There are 19.13 billion WILF tokens to be sold. According to the target, the sales volume should be 20 billion, about 300 million US dollars. The gap between expectations and actual sales is so large mainly because World Liberty Financial restricted the qualifications of token buyers and the tokens are not transferable.
Unlike most token sales, which are open to everyone and can be purchased anonymously, only accredited investors or non-residents in the United States can purchase Trump's DeFi tokens. To purchase WLFI, when a user first visits the website, they will be asked whether they live in the United States and meet the "accredited investor" criteria set forth in Section D of the (U.S. Securities Act of 1933), or live outside the United States.
According to Investopedia, a U.S. resident investor can only be considered an "accredited investor" if they have an annual income of more than $200,000, a net worth of more than $1 million, or are a general partner, officer, or director of a firm issuing unregistered securities.
Users can bypass this KYC requirement by clicking “I live outside the United States” but will then have to provide proof of residency outside the U.S. to proceed. Since many of Trump’s supporters are mostly rednecks from the U.S., they live in the U.S. and are not accredited investors, this may be the main reason for the weak token sale.
Second, WLFI cannot be transferred between wallets for the time being. This means that accredited investors cannot sell tokens to non-accredited investors, and people living outside the United States cannot sell them to U.S. residents. In fact, holders cannot sell the token at all. The only thing they can do is wait for the DeFi protocol to be released, when the developers say holders will be able to vote on proposals that affect the protocol.
Website downtime also affected the token sale. Despite raising only $13 million, the World Liberty Financial website was unable to handle the traffic. Some users reported that they encountered a “this page isn’t working properly” message when trying to purchase tokens.
The project was criticized by the crypto community, but Trump's approval rating has "turned around"
On October 18, World Liberty Financial released a 13-page document describing its mission and how tokens will be distributed, noting that Trump and his family could receive 75% of the net income, meaning that the Trump family would receive 22.5 billion "WLFI" tokens, currently worth $337.5 million based on a price of 1.5 cents per token at the time of issuance.
The document states that Trump and his family do not bear any responsibility and are not directors, employees, managers or operators of WLF or its affiliates, and that the project and tokens are "not political and are not affiliated with any political campaign."
The filing shows that 75% of the net proceeds from the agreement will be distributed to a company called DT Marks DEFI LLC, which is based in Delaware and has ties to Trump. The remaining 25% of the net proceeds from the agreement will be distributed to Axiom Management Group (AMG), a limited liability company based in Puerto Rico that is wholly owned by Chase Herro and Zachary Folkman, two co-founders of World Liberty Financial.
Due to its high share of protocol revenue and lack of innovation, the Trump project has sparked criticism in the crypto community. "The presidential candidate supports this project, which is actually the only difference between it and about a dozen similar DeFi lending protocols," Tezos CEO Kathleen Breitman said in an interview with CNBC.
Rashan Colbert, head of dYdX Trading policy, said that whether it is connected to a truly unique project, through useful technical features, or simply for entertainment, there must be something valuable to spark interest. But many cryptocurrency supporters have developed some disgust with the continued politicization of the community and failed to find value in boring money-making activities.
This view was supported by Alexander Blume, CEO of Two Prime. He said that apart from the fact that it has Trump branding, I don't see anything interesting or unique about it, which is not enough for most people. "I feel like the crypto community was quite skeptical about this project before it was launched. It just looked speculative, especially because it didn't do anything novel."
Rumi Morales, partner and board member of Outlier Ventures, noted that the project's golden white paper "looks rushed and full of errors." Morales said that in today's market, even in the face of challenges, the super active people are experienced and discerning. They know how to distinguish between opportunities and games, and they are not hecklers or novices. This WLF launch may have had a chance in the less picky days of the ICO boom in 2017, or even in the DeFi summer of 2020, but we are now past those years. The WLF team does not seem to realize how sharp and sophisticated the community is - we have our own ideas.
Matt Hougan, chief investment officer at Bitwise, said a personality-driven DeFi project is not feasible. In DeFi, practicality is important. "WLF strikes me as a meme disguised as a practical project. I think people realized that, so it didn't work. DeFi also cannot be personality-centric, which is where the 'De' comes from. Therefore, a personality-centric DeFi project is like oil and water that don't mix."
Despite this, on October 17, according to the forecasting website Polymarket, Trump's chances of winning the US presidential election rose to 62.5%, a record high, and Vice President Harris's chances of being elected were 37.5%. The latest poll results released by NBC show that by November 5, voting day, Harris and Trump's national support rates are expected to be the same, both at 48%. In the same survey last month, Harris's support rate was 5 percentage points ahead.
On October 16, CNBC reported that according to documents submitted to the Federal Election Commission, Trump's political action committee "Trump 47 Committee" has raised about $7.5 million through cryptocurrencies, and its donors donated BTC, ETH and XRP to the Trump campaign, as well as USDT and USDC. Trump demonstrated his strength in attracting money from "cryptocurrency", which was partly due to Harris's performance that was not as good as expected.
Recently, Harris announced a series of economic security plans for black male voters during her campaign, including a promise to support a crypto regulatory framework to protect black male cryptocurrency investments. After the plan was announced, Harris was accused of "lack of sincerity" by the crypto community, further weakening Harris' influence in the crypto community.
It now seems that although all parties have introduced crypto policies to varying degrees to attract voters, Trump has seized the initiative. His strategy has inspired the enthusiasm of some supporters and won critical time and resources. Harris needs to have a deeper understanding of the needs of the crypto market in order to reverse the situation in the upcoming election and reshape his influence in the crypto community. As the election day approaches, the outcome of this showdown will have a profound impact on future crypto regulatory policies.
