Article source: Blockchain in Plain Language
Author | Huohuo
Produced by | Blockchain in Plain Language
Trump's victory in the U.S. presidential election pushed Bitcoin to break the $100,000 mark, accelerating this round of the bull market. Not only Bitcoin, but projects related to the Trump team are also taking off.
Recently, World Liberty Financial (hereinafter referred to as WLFI), closely related to the Trump family, has frequently purchased ETH, LINK, AAVE, ENA, etc., sparking a market following trend and becoming an undeniable barometer in the crypto investment market.
So, what is WLFI, and what market-impacting actions might it take in the future?
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 founder's 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 development of global 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 more than half being used 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 exchange, which implies that users cannot trade/exchange/sell WLFI after holding the token. Although this may change through governance proposals in the future, currently, the token cannot be traded for a long time.
Possibly due to its non-transferability, WLFI has provided little short-term profit opportunity for cryptocurrency investors since its launch on October 15.
Additionally, it is noteworthy that WLFI is only available for users outside the United States and is not registered with any financial regulatory agency. This means that U.S. residents cannot participate in trading these tokens, possibly considering the need to evade U.S. law enforcement regulations.
Considering its promotion method, to be more straightforward, WLFI is seeking to promote the use of USD stablecoins and DeFi applications under the influence of Trump, aiming to strengthen the dollar's position in the DeFi field.
Therefore, we have to explore how the Trump family supports this project.
1) Team member situation
According to WLFI's official information, there is a statement describing itself: inspired by Trump, promoting the widespread adoption of stablecoins and DeFi, especially USD stablecoins, to ensure the dollar's dominance.
Donald Trump himself serves as the 'Chief Cryptocurrency Advocate' for this 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 content of the white paper, DT Marks DEFI LLC (a company under Trump) agreed to promote WLFI and grant it the right to use the names and images of Trump family members for promotion. 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 has legally circumvented any connection with WLFI. Although WLFI claims to be 'the only DeFi platform inspired by Trump,' the positions of advocates and ambassadors from the Trump family are not real positions in any management capacity, and there is a small print at the bottom of the official website:
Donald J. Trump, any family member, or any director, officer, or employee of the Trump Organization, DT Marks DEFI LLC, or their respective affiliates, are not officers, 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.
Therefore, some critics believe that WLFI is deeply bound to the Trump family and is a branded product of the Trump family, with unknown operators leveraging the Trump family's reputation to launch products, while the Trump family provides branding and profits. Such commercial operations are commonplace for the Trump family, as evidenced by Trump hotels or buildings named after him worldwide, many of which are collaborations under licenses and branding.
Overall, although various promotions claim that WLFI has numerous ties to the Trump family, there is actually no legal connection. This may also be one of the reasons why people are skeptical about WLFI.
In addition to the strong support of the Trump family, the WLFI team is composed of experienced crypto practitioners.
The official website shows that WLFI has a total of five founders, among whom Chase Herro and Zak Folkman's industry resumes are not particularly impressive. According to CoinDesk, they previously launched a lukewarm DeFi product called Dough Finance, which suffered a hacker attack in the summer of 2024, resulting in a loss of $2 million. Additionally, WLFI's blockchain lead, Octavian Lojnita, and an anonymous developer also come from the former company Dough Finance. CoinDesk's report also indicated that reviews showed the codebase released on WLFI in the early stages directly copied Dough Finance's code, which was later deleted.
However, WLFI states that they have had their code reviewed by multiple auditing firms (such as BlockSec, Fuzzland, PeckShield, Zokyo, etc.) to ensure security.
In addition to Chase Herro and Zak Folkman, the other three co-founders of WLFI are from Steven Witkoff's family (founder Steven Witkoff, Zach Witkoff, Alex Witkoff), with Steven Witkoff being a well-known real estate developer in the U.S. and a friend of Trump.
Furthermore, WLFI also has a consulting team composed of venture capitalists, lawyers, and blockchain engineers. Among them are co-founder Sandy Peng from the Ethereum Layer 2 blockchain Scroll and Luke Pearson, a general partner at Polychain Capital.
It can be seen that these advisors all have specific technical expertise and market experience, which helps WLFI achieve its long-term goals, especially in promoting USD stablecoins and expanding DeFi applications.
2) Development status
Although the entire altcoin market is starting to recover under the influence of Bitcoin, WLFI's sales remain unoptimistic, having sold only about a quarter of its offerings since the launch.
However, two things are worth noting: First, at the end of November, Tron founder Sun Yuchen spent $30 million to allocate 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.
After announcing Sun Yuchen as the advisory ambassador, on December 18, WLFI announced a partnership with Ethena Labs, with both parties seeking long-term cooperation, starting with the revenue token sUSDe from Ethena.
In addition, the most notable aspect is the various altcoins exchanged by WLFI; every move directly triggers a wave of trading enthusiasm.
02, On-chain activity of the WLFI project
According to monitoring by Spot On Chain, since November 2024, WLFI has reserved various mainstream and emerging crypto assets through a main wallet address, especially in December, accumulating expenditures close to $45 million, including 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 does not need to elaborate on its status and influence in the industry.
WLFI has repeatedly acquired ETH, spending the most on ETH; previous reports indicated that it spent $30 million to reserve 8,105 ETH at a unit price of about $3,700, while the most recent operation was on December 20, acquiring 722.213 ETH for $2.5 million through Cow Protocol. 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 Ethereum and other blockchain networks. WLFI spent $10 million to exchange for about 103 cbBTC, with an average price of $97,181 per piece; subsequently, WLFI converted all cbBTC into WBTC.
This action occurred on the same day that Coinbase announced the delisting of WBTC for failing to meet CEX standards. The delisting of WBTC by Coinbase was seen as support for WBTC by WLFI.
WLFI's choice to exchange cbBTC for WBTC may be due to considerations of WBTC's maturity and infrastructure advantages in the market, and it may also have been influenced by the involvement of Sun Yuchen as an advisor.
Because Sun Yuchen's custody company BiT Global announced a partnership with BitGo, the company behind WBTC, in August this year, under which the WBTC business was transferred from the original company to BiT Global and Sun Yuchen.
3) AAVE
AAVE is a decentralized lending protocol based on Ethereum that allows users to deposit to earn interest or borrow crypto assets, which is what WLFI leverages through the protocol it launched.
WLFI has also been very active in investing in AAVE tokens, making multiple allocations. WLFI exchanged AAVE at a price of $24.6 million for a unit price of $360; also exchanged $1.25 million for a unit price of $308.4; and additionally, exchanged $1 million for 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 aimed at providing reliable off-chain data for smart contracts on the blockchain. In simple terms, Chainlink helps blockchains access and use external data.
WLFI's investment in LINK has also been quite frequent, having allocated LINK at prices like $34.2, $25.5, and $27, spending a total of about $8 million. Currently, WLFI holds a total of 78,300 LINK.
Reports indicate that WLFI will integrate with Chainlink oracles to accelerate the adoption of DeFi. As Chainlink is currently the leading data oracle solution in 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, the purchase of LINK may be aimed at acquiring and utilizing Chainlink's services to enhance the platform's functionality and credibility.
5) ENA
Ethena (ENA) is a decentralized finance 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 price of $1.011 per piece; additionally, at a price of $500,000, averaging 0.98 USDT each, it has reserved 509,954 ENA, 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, merely indicating 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 U.S. money market fund OMMF, Blackrock's short-term U.S. Treasury ETF OUSG, tokenized notes USDY, and Flux Finance, which supports tokenized securities collateral.
For Ondo, WLFI only has one allocation operation, spending a total of $250,000 to acquire 134,000 ONDO, with an average price of $1.86 per piece at the time of operation.
03, What other information has been revealed?
It can be seen that the WLFI project has made many recent on-chain operations, and the tokens it has allocated include stablecoins (USDT), collateralized lending, RWA, oracles, and wrapped Bitcoin projects, basically covering all categories of on-chain DeFi. However, in addition to the clear DeFi asset reserves, we can also see the following points from the on-chain activities of the project:
1) Use Safe multi-signature wallet
The Safe multi-signature wallet is an asset management tool based on smart contracts that enhances the security of digital assets through a multi-signature mechanism (requiring multiple accounts to jointly sign). It allows flexible signature rule settings; in the Safe multi-signature wallet, it can be set for single-sign (e.g., 1/1), allowing one person to authorize the transaction, or configured for multi-sign (e.g., 2/3 or 3/5), requiring a pre-set number of signatories for the operation to be completed. It is also compatible with various blockchain and token types, widely used in team funds management, DAO financial operations, personal asset protection, and custody services, favored by Web3 users for its high security and transparency.
WLFI's on-chain operations involve a Safe multi-signature wallet with seven signers, one of which is an active DeFi user.
2) Token exchange through Cowswap built into the Safe wallet
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 the CoW Protocol, which integrates features such as batch trading (Batch Auctions), trade intents (Trade Intents), and MEV protection, deployed on Ethereum and Gnosis, and is currently one of the popular DEXs.
Due to the large number of exchanges made by WLFI through its wallet, the native token COW of the CoW Protocol saw its price soar over 30% within 24 hours and over 80% in 7 days.
3) Considerations behind token selection
Diversified investment portfolio: By allocating tokens in different fields, WLFI can not only reduce the volatility risk of a single asset and capture more market growth opportunities, but also enhance the capital operation effect by leveraging market enthusiasm.
Enhancing DeFi ecosystem influence: Most of these tokens belong to core DeFi assets, and allocating these tokens helps WLFI expand its layout and influence in the DeFi ecosystem.
Strategic collaboration opportunities: Certain specific assets allocated (such as ENA and ONDO) may be based on considerations of cooperation with these projects to enhance their brand value and market voice.
Overall, this aligns well with WLIF project's development goals, which aim to continuously increase influence through various means to build a comprehensive on-chain lending and trading platform.
04, Summary
If the price of BTC previously rose from $70,000 to over $100,000 due to the 'Trump effect,' then the tokens held by WLFI have similarly been driven by this effect. For example, on December 14, after WLFI allocated LINK and AAVE, LINK holdings gained $299,000, and AAVE holdings gained $338,000. On December 16, as news of WLFI's actions spread, ONDO's price broke through 2.1 USDT, setting a new historical high with a 24-hour increase of 16.33%.
Therefore, there are rumors that WLFI's assets may become a barometer for established DeFi, and people are speculating about which crypto assets WLFI will reserve next.
Some believe that the supporting team behind the investment advisor is worth paying attention to, while others think that leading projects in each sector, with high asset and brand value, may become new targets. Still, some believe that high-quality DeFi assets in the top 100 market cap cannot be ignored.
However, we are looking forward to what actions WLFI will take next.
