Written by: Huo Huo, Plain Language Blockchain
Trump's victory in the US presidential election pushed Bitcoin above the $100,000 mark, accelerating the progress of this round of bull market. Not only Bitcoin, but also projects related to Trump's team are taking off.
Recently, World Liberty Financial (hereinafter referred to as WLFI), which has close ties with the Trump family, has frequently purchased ETH, LINK, AAVE, ENA, etc., triggering a follow-up craze in the market and becoming an indicator that cannot be ignored in the crypto investment market.
So, what is WLFI, and what actions might impact the market 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) and was officially launched on the Ethereum mainnet's Aave V3 platform in September 2023.
WLFI is essentially a DeFi platform supporting users to borrow, lend, and invest in cryptocurrencies. The founder's vision is to create a tool for financial independence, allowing users to conduct private peer-to-peer transactions without relying on traditional financial intermediaries, thereby promoting the development of global decentralized finance, especially for individuals 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, granting each Token holder one voting right in community proposals on the governance platform. However, its initial distribution plan has been adjusted, shifting from more than half being for sale to community and creator rewards, reflecting changes in community incentives and initial supporter shares.
Unlike other governance Tokens such as UNI and MKR, WLFI does not provide economic rights, meaning that it cannot be transferred after redemption, which means 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 low liquidity since its launch on October 15, as it cannot provide short-term profit opportunities for cryptocurrency investors.
It is also noteworthy that WLFI is only available for participation by users outside the United States and has not registered with any financial regulatory agencies. This means that U.S. residents cannot participate in trading these Tokens, possibly to avoid U.S. law enforcement regulation.
Taking into account its promotional methods, to put it more straightforwardly, WLFI is seeking to promote the use of dollar stablecoins and DeFi applications under Trump's influence, aiming to strengthen the dollar's position in the DeFi space.
Therefore, it is essential to explore how the Trump family supports this project.
1) Team Member Situation
According to official WLFI materials, there is a statement that describes itself as: Inspired by Trump, promoting the mass adoption of stablecoins and DeFi, especially dollar stablecoins, thereby ensuring the dominance of the dollar.
Donald Trump himself serves as the "Chief Cryptocurrency Advocate" for the project, while his sons Eric Trump, Donald Trump Jr., and Barron Trump serve as Web3 ambassadors, helping to 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 granted it the right to use the names and images of Trump family members for publicity. In return, WLFI pays Tokens to DT Marks DEFI LLC and shares a portion of the net income from the agreement (about 75%).
However, the Trump family has legally circumvented any connection to WLFI. While WLFI claims to be "the only DeFi platform inspired by Trump", the roles of advocates and ambassadors from the Trump family are not real management positions, and there is a disclaimer at the bottom of the official website stating:
Donald J. Trump, any family member, or any director, officer, or employee of the Trump Organization, DT Marks DEFI LLC, or any of 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 tied to the Trump family, acting as a brand product of the Trump family, with unknown operators leveraging the Trump family's reputation to launch products, while the Trump family brands and profits from them. Such business operations are commonplace for the Trump family. For example, many hotels or buildings named after Trump around the world are often collaborations with Trump under licensing and branding agreements.
Overall, although various promotions claim that WLFI has numerous connections with the Trump family, there is no actual legal connection. This might be one reason why people are not fully convinced by WLFI.
In addition to the strong support from the Trump family, the WLFI team is made up of experienced crypto practitioners.
The official website shows that WLFI has a total of five founders, among whom Chase Herro and Zak Folkman have relatively unimpressive industry resumes. According to CoinDesk, they previously launched a lukewarm DeFi product called Dough Finance, which suffered a $2 million loss due to a hack in the summer of 2024. Additionally, WLFI's blockchain head, Octavian Lojnita, and an anonymous developer also came from the former company Dough Finance. CoinDesk's report also indicated that reviews showed that the code repository published on WLFI at an early stage directly copied Dough Finance's code, which was later deleted.
However, WLFI stated that their code has been reviewed by multiple auditing firms (such as BlockSec, Fuzzland, PeckShield, Zokyo, etc.) for security.
In addition to Chase Herro and Zak Folkman, the other three co-founders of WLFI are Steven Witkoff and his family (founder Steven Witkoff, Zach Witkoff, Alex Witkoff), with Steven Witkoff being a well-known real estate developer in the United States and a friend of Trump.
In addition, WLFI also has a team of advisors consisting of venture capitalists, lawyers, and blockchain engineers. Among them are co-founders from the Ethereum Layer 2 blockchain Scroll, Sandy Peng, and Luke Pearson, a general partner at Polychain Capital.
It can be seen that these advisors have specific technical expertise and market experience, which helps WLFI achieve its long-term goals, especially in promoting the use of dollar stablecoins and expanding DeFi applications.
2) Recent Developments
Although the entire altcoin market has begun to recover under the influence of Bitcoin, WLFI's sales are still not optimistic, having sold only about a quarter since its issuance.
However, two things are worth noting. First, at the end of November, Sun Yuchen spent $30 million to acquire WLFI Tokens to show support for the project, becoming the largest publicly known investor in the project. Subsequently, on November 26, Sun Yuchen was appointed as an advisor to WLFI.
Following the announcement of Sun Yuchen as an ambassador advisor, 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, as each move can directly drive a wave of trading enthusiasm.
02 WLFI Project's On-Chain Activities
According to monitoring by Spot On Chain, since November 2024, WLFI has reserved various mainstream and emerging cryptocurrencies through a main wallet address, especially in December, with total expenditures approaching $45 million, including ETH, cbBTC, LINK, AAVE, ENA, and the latest ONDO, with the 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 second-largest cryptocurrency platform globally, naturally has significant status and influence in the industry.
WLFI has repeatedly acquired ETH, with the most expenditure on ETH. Previously, reports indicated it spent $30 million to reserve 8,105 ETH at an average price of about $3,700, while the most recent operation was on December 20, where it acquired 722.213 ETH for $2.5 million through Cow Protocol, bringing WLFI's total ETH holdings to 16,400 ETH.
2) cbBTC
cbBTC (Coinbase Wrapped Bitcoin) is an ERC-20 Token launched by Coinbase, aimed at bringing the value of Bitcoin (BTC) to blockchain networks such as Ethereum. WLFI spent $10 million to exchange for about 103 cbBTC, with an average transaction price of $97,181 per Token; subsequently, WLFI converted all cbBTC into WBTC holdings.
This move occurred on the same day Coinbase announced the delisting of WBTC due to its failure to meet CEX standards. WLFI's actions are seen as support for WBTC.
WLFI's choice to convert cbBTC to WBTC may be due to considerations of WBTC's maturity and infrastructure advantages in the market, or it may have been influenced by Sun Yuchen's role as an advisor in this decision.
Due to the collaboration announced between Sun Yuchen's custody company BiT Global and BitGo, the company behind WBTC, in August this year, the WBTC 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, which is the protocol WLFI is leveraging.
WLFI has also been very active in investing in AAVE Tokens, having made multiple configurations. WLFI exchanged $246,000 for AAVE at a price of $360 per token; again, it exchanged $1.25 million for AAVE at a price of $308.4 per token; additionally, it exchanged $1 million for AAVE at a price of $297.8 per token. 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 access and use external data.
WLFI's investment in LINK has also been relatively frequent, with configurations at prices of $34.2, $25.5, $27, etc., totaling about $8 million. Currently, WLFI holds a total of 78,300 LINK.
There are reports that WLFI will integrate with Chainlink oracles to accelerate the promotion and adoption of DeFi. As Chainlink is currently the leading data oracle solution in the market, WLFI, as a DeFi platform, may need to utilize Chainlink's oracle services to ensure the accuracy and security of its financial products. Therefore, acquiring LINK may be for accessing and using 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 provides 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 transaction price of $1.011 per Token; additionally, at a price of $500,000, with an average of 0.98 USDT per Token, it 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 cooperation 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 converting traditional liquidity services into tokenization of real-world assets, connecting crypto assets with the real economy. Its flagship products are bond RWAs, and currently, Ondo has launched four products on Binance contracts, including the US money market fund OMMF, Blackrock's short-term US Treasury ETF OUSG, tokenized notes USDY, and Flux Finance, which supports tokenized securities collateral.
For Ondo, WLFI only had one configuration operation, spending a total of $250,000 to acquire 134,000 ONDO, with an average price of $1.86 per token.
03 What other information has been revealed?
It can be seen that the WLFI project has recently made many on-chain operations, configuring Tokens that include stablecoins (USDT), collateralized borrowing, RWA, oracles, and wrapped Bitcoin projects, essentially covering all categories of on-chain DeFi. However, in addition to the obvious DeFi asset reserves, we can also observe the following points from the project's on-chain activities:
1) Use Safe Multi-Signature Wallet
The Safe multi-signature wallet is an asset management tool based on smart contracts, which enhances the security of digital assets through a multi-signature mechanism (multiple accounts must jointly sign). It supports flexible signature rule settings; in a Safe multi-signature wallet, it can be set for single-signature (e.g., 1/1), where one person can authorize transactions, or configured for multi-signature (e.g., 2/3 or 3/5), which requires a predetermined number of signers to complete actions. It is also compatible with various blockchains and Token types, widely used in team fund management, DAO financial operations, personal asset protection, and custody services, favored by Web3 users for its high security and transparency.
The Safe multi-signature wallet used by WLFI for on-chain operations has a total of seven signers, one of whom 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, serving as a DEX aggregation protocol that integrates features such as batch trading (Batch Auctions), trade intents, and MEV protection, deployed on Ethereum and Gnosis, and is currently one of the popular DEXs.
Due to WLFI's significant exchanges through its wallet, the price of CoW Protocol's native Token COW soared over 30% within 24 hours, and increased by over 80% within a week.
3) Metrics Behind Token Selection
Diverse investment 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 enhance capital operation effects by leveraging market enthusiasm.
Enhance 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 partnership opportunities: Some specific assets configured (such as ENA and ONDO) may be based on considerations of collaboration with these projects, thereby enhancing their brand value and market voice.
Overall, this aligns well with WLIF's project development goals, which aim to continuously enhance influence through various means to build a comprehensive on-chain borrowing and trading platform.
04 Summary
If the price of BTC previously rose from $70,000 to more than $100,000 due to the "Trump effect", then the Tokens held by WLFI were similarly driven by this effect. For example, on December 14, after WLFI configured LINK and AAVE, the LINK holding showed an unrealized gain of $299,000, and the AAVE holding showed an unrealized gain of $338,000. On December 16, as news of WLFI's operations spread, the price of ONDO broke through 2.1 USDT, reaching a historic high with a 24-hour increase of 16.33%.
As a result, there are market rumors that WLFI's assets may become a barometer for established DeFi, and speculation is rife regarding which crypto assets WLFI will next reserve.
Some believe the supporting teams behind investment advisors are worth noting, while others think that top projects in various fields, such as those with high asset value and brand value, may become new targets. Still, others believe that quality DeFi assets with a market cap in the top 100 cannot be ignored.
But what actions WLFI will take next remains to be seen.
