Trump's victory in the U.S. presidential election drove Bitcoin to break the $100,000 mark, accelerating this bull market. Not only Bitcoin, but also projects related to Trump's team are gaining momentum.
Recently, World Liberty Financial (hereinafter referred to as WLFI), closely related to the Trump family, has frequently purchased ETH, LINK, AAVE, ENA, etc., leading to a market frenzy and becoming a notable barometer in the crypto investment market.
So, what is WLFI, and what actions might it take in the future that could impact the market?
01
What is WLFI?
WLFI is a DeFi project supported by Trump and his family (including his eldest son Donald Trump Jr., third son Eric Trump, and youngest son Barron Trump), officially launched on the Aave V3 platform on the Ethereum mainnet in September 2023.
WLFI is essentially a DeFi platform that supports users to borrow, lend, and invest in cryptocurrencies. The founders' vision is to create a tool for achieving financial independence, allowing users to conduct private peer-to-peer transactions without relying on traditional financial intermediaries, thus promoting the global development of decentralized finance, especially for those underserved by traditional banking services. The Trump family has referred to it as 'the future of crypto DeFi.'
WLFI is the governance token of World Liberty Financial, with each token granting its holder one vote in community proposals on the governance platform. However, its initial distribution plan has undergone adjustments, shifting from previously using more than half for sales to community and creator rewards, reflecting changes in community incentives and the share of initial supporters.
Unlike other governance tokens such as UNI and MKR, WLFI does not provide economic rights, meaning it cannot be transferred after redemption, which means users cannot trade/exchange/sell WLFI after holding the token. While this may change in the future through governance proposals, currently the token cannot be traded for a long time.
Possibly due to its non-transferability, WLFI has had low liquidity since its launch on October 15, as it does not provide short-term profit opportunities for cryptocurrency investors.
Additionally, it is worth noting that WLFI is only available for users outside the United States, and is not registered with any financial regulatory authority. This means that U.S. residents cannot participate in trading these tokens, which may be a consideration to avoid regulation by U.S. enforcement agencies.
Combined with its promotional methods, it can be said more straightforwardly that WLFI is a project under the influence of Trump, aimed at promoting the use of dollar stablecoins and DeFi applications, striving to enhance the position of the dollar in the DeFi field.
Therefore, it is necessary to explore how the Trump family supports this project.
1) Team member situation
According to WLFI's official information, there is a passage that describes itself: Inspired by Trump, promoting the widespread adoption of stablecoins and DeFi, especially dollar stablecoins, to ensure the dollar's dominance.
Donald Trump himself serves as the 'chief cryptocurrency advocate' for the project, while his sons Eric Trump, Donald Trump Jr., and Barron Trump act as Web3 ambassadors to help promote the platform and attract mainstream users.
In this context, according to the white paper's content, DT Marks DEFI LLC (a company under Trump) agreed to promote WLFI and granted it the right to use the names and images of Trump family members for promotional purposes. In return, WLFI pays tokens to DT Marks DEFI LLC and shares a portion of the net income from the agreement (approximately 75%).
However, the Trump family legally circumvented all connections with WLFI. Although WLFI claims to be the 'only DeFi platform inspired by Trump,' the positions of advocates and ambassadors within the Trump family are not real management roles, and there is a small print at the bottom of the official website:
Donald J. Trump, any family members, or any directors, officers, or employees of the Trump Group, DT Marks DEFI LLC, or their respective affiliates are not managers, directors, founders, or employees of WLFI or its affiliates. ... World Liberty Financial and its WLFI Token are not political in nature and are not part of any political campaign activities.
2) Recent developments
Although the entire altcoin market has begun to recover under Bitcoin's influence, WLFI's sales remain unoptimistic, having sold only about a quarter since its launch.
However, there are two noteworthy things. First, at the end of November, Sun Yuchen, the founder of Tron, spent $30 million to configure WLFI tokens to show support for the project, becoming the largest public investor in the project. Subsequently, on November 26, Sun Yuchen was appointed as an advisor to WLFI.
Following the announcement of Sun Yuchen as the advisor ambassador, on December 18, WLFI announced a partnership with Ethena Labs, seeking long-term cooperation, with the starting plan to begin with Ethena's yield token sUSDe.
In addition, the most attention-grabbing aspect is WLFI's exchanges of various altcoins, as each move can directly stimulate a wave of trading frenzy.
02
WLFI project's on-chain activities
According to monitoring by Spot On Chain, since November 2024, WLFI has reserved various mainstream and emerging crypto assets through a primary wallet address, especially in December, accumulating expenditures close to $45 million, which includes ETH, cbBTC, LINK, AAVE, ENA, and the latest ONDO, with a total holding value exceeding $84.8 million.
Source: https://intel.arkm.com/explorer/entity/worldlibertyfi
According to incomplete statistics, its reserved crypto assets include:
1) ETH
Ethereum, as the world's second-largest cryptocurrency platform, naturally holds a significant position and influence in the industry.
WLFI has made multiple acquisitions of ETH, spending the most on ETH. Previous reports indicated that it spent $30 million to reserve 8,105 ETH at an average price of about $3,700. The most recent operation was on December 20, acquiring 722.213 ETH through Cow Protocol for $2.5 million. After this transaction, WLFI's total ETH holdings reached 16,400 ETH.
2) cbBTC
cbBTC (Coinbase Wrapped Bitcoin) is an ERC-20 token launched by Coinbase, designed to bring the value of Bitcoin (BTC) to blockchain networks such as Ethereum. WLFI spent $10 million to exchange for about 103 cbBTC, with an average operation price of $97,181 per piece; subsequently, WLFI converted all cbBTC into WBTC.
This action occurred on the same day Coinbase announced delisting WBTC due to non-compliance with CEX standards. WLFI's move was seen as support for WBTC following Coinbase's delisting.
WLFI's choice to exchange cbBTC for WBTC may be due to considerations of WBTC's market maturity and infrastructure advantages, or it may have been influenced by Sun Yuchen's joining as an advisor.
This is because Sun Yuchen's custody company BiT Global and BitGo, the company behind WBTC, announced a partnership in August this year, during which WBTC's business was transferred from the original company to BiT Global and Sun Yuchen.
3) AAVE
AAVE is a decentralized borrowing protocol based on Ethereum that allows users to deposit to earn interest or borrow crypto assets, essentially what WLFI leverages through the launched protocol.
WLFI has also been active in its investment in AAVE tokens, having made multiple configurations. WLFI exchanged $246,000 for AAVE at a unit price of $360; exchanged $1.25 million for AAVE at a unit price of $308.4; and exchanged $1 million for AAVE at a unit price of $297.8. Currently, WLFI holds a total of 6.137 million AAVE.
4) LINK
The project behind LINK is Chainlink, a decentralized oracle network designed to provide reliable off-chain data for smart contracts on the blockchain. In simple terms, Chainlink helps blockchains obtain and use external data.
WLFI's investment in LINK is also quite frequent, having configured LINK at prices of $34.2, $25.5, and $27, with a total expenditure of about $8 million. Currently, WLFI holds a total of 78,300 LINK.
There are reports that WLFI will integrate with the Chainlink oracle to accelerate the adoption of DeFi. As the leading data oracle solution on the market, WLFI, as a DeFi platform, may need to leverage Chainlink's oracle services to ensure the accuracy and security of its financial products. Therefore, purchasing LINK may be aimed at accessing and utilizing Chainlink's services to enhance the platform's functionality and credibility.
5) ENA
Ethena (ENA) is a decentralized financial platform that ensures asset stability through an algorithmic stablecoin mechanism. ENA can be used for collateral, trading, and governance. The platform offers efficient trading, liquidity mining, and DeFi integration, aiming to provide stable and transparent financial services for crypto assets.
WLFI has spent a total of $750,000 to reserve 741,687 ENA, with an average operation price of $1.011 per piece; additionally, it has reserved 509,954 ENA at a price of $500, with an average of 0.98 USDT per piece, currently holding a total of 741,000 ENA.
However, a spokesperson for WLFI stated that the purchase of ENA tokens is not directly related to the partnership with Ethena Labs, but rather indicates WLFI's confidence in the long-term viability and success of the Ethena network.
6) ONDO
The project behind Ondo is Ondo Finance, a DeFi protocol based on Ethereum aimed at tokenizing traditional liquidity services into real-world assets, connecting crypto assets with the real economy. Its flagship products are bonds RWA, and currently, Ondo has launched four products on Binance contracts, including the US money market fund OMMF, Blackrock short-term US treasury ETF OUSG, tokenized notes USDY, and Flux Finance supporting tokenized security collateral.
For Ondo, WLFI has only made one configuration operation, spending a total of $250,000 to configure 134,000 ONDO, with an average operation price of $1.86 per piece.
03
What other information has been revealed?
It can be seen that the WLFI project has made many on-chain operations recently, with its configured tokens including stablecoins (USDT), collateral borrowing, RWA, oracles, and wrapped Bitcoin projects, essentially covering all categories of on-chain DeFi. In addition to the obvious DeFi asset reserves, we can also see the following points from the project's on-chain activities:
1) Use of Safe multi-signature wallet
The Safe multi-signature wallet is an asset management tool based on smart contracts, enhancing the security of digital assets through a multi-signature mechanism (which requires multiple accounts to jointly sign). It supports flexible signing rule settings. In the Safe multi-signature wallet, it can be set for single-signature (e.g., 1/1), allowing one person to authorize a transaction, or configured for multi-signature (e.g., 2/3 or 3/5), requiring a pre-set number of signers to complete the operation. It is compatible with various blockchain and token types, widely used in team fund management, DAO financial operations, personal asset protection, and custody services, and is favored by Web3 users for its high security and transparency.
The Safe multi-signature wallet used for WLFI on-chain operations has a total of 7 signers, including one active DeFi user.
2) Token exchange through Safe wallet's built-in Cowswap
On-chain data shows that WLFI has conducted over 150 transactions through the decentralized exchange CowSwap in less than two months. CoW Swap is the front end of CoW Protocol, acting as a DEX aggregation protocol that integrates functionalities such as batch trading (Batch Auctions), trade intents, and MEV protection, deployed on Ethereum and Gnosis, and is one of the popular DEXs currently.
Due to the large number of exchanges conducted by WLFI through its wallet, the native token COW of CoW Protocol saw its price surge over 30% within 24 hours and rose by more than 80% within 7 days.
3) Measurement behind token selection
Diversified portfolio: By configuring tokens from different fields, WLFI can not only reduce the volatility risk of a single asset and capture more market growth opportunities but also leverage market heat to enhance capital operation effects.
Enhancing the influence of the DeFi ecosystem: Most of these tokens belong to core DeFi assets, and configuring these tokens helps WLFI expand its layout and influence in the DeFi ecosystem.
Strategic cooperation opportunities: Certain specific assets (like ENA and ONDO) may be configured based on cooperation considerations with these projects, thereby enhancing its own brand value and market voice.
Overall, this aligns well with WLIF's development goals, which aim to continuously enhance influence through various means to build a comprehensive on-chain borrowing and trading platform.
04
Summary
If BTC's price previously climbed from $70,000 to over $100,000 due to the 'Trump effect,' then the tokens held by WLFI are similarly driven by this effect. For example, on December 14, after WLFI configured LINK and AAVE, the holding of LINK made a floating profit of $299,000, and the holding of AAVE made a floating profit of $338,000. On December 16, with the dissemination of WLFI's operational news, ONDO's price broke through 2.1 USDT, setting a new historical high with a 24-hour increase of 16.33%.
As a result, there are rumors that WLFI's assets could potentially become a bellwether for established DeFi, and speculation abounds about what crypto assets WLFI will next reserve.
Some believe that the team behind the investment consultants deserves attention, while others think that leading projects with high asset value and brand value may become new targets. There are also those who believe that high-quality DeFi assets in the top 100 market caps should not be overlooked.
However, we will wait and see what actions WLFI will take next.
