Former United States President Donald Trump’s token launch was something of a flop.

On Oct. 16, former United States President Donald Trump launched his World Liberty Financial (WLFI) token. The token’s website claimed it would allow investors to gain voting rights over a future decentralized finance (DeFi) protocol. 

However, after nearly a full day of trading, the token’s sales have been tepid. As of 10:00 am UTC on Oct. 17, the token’s website shows that only 848.63 million WLFI ($12.7 million worth based on the presale price) has been sold, leaving an additional 19.1 billion coins ($287 million) unsold. The amount sold on the first day constitutes just 4.24% of the total.

Number of WLFI tokens sold. Source: World Liberty Financial.

But why did the token flop so badly on the first day of trading, despite the former president’s notoriety? Here are five causes that may explain the token’s surprisingly bad performance.

There were limits on who could purchase Trump’s token

Unlike most token presales, which are open to anyone and can be purchased anonymously, only accredited US investors or non-residents could buy the Trump DeFi coin.

When users first visit the website, they are asked if they live in the US and “meet the requirements to be deemed an ‘accredited investor’ as defined under Regulation D under the U.S. Securities Act of 1933” or live outside the US. 

Users who don’t fit into either category are not allowed to progress further into the website.

Buyers are not allowed to get tokens unless they first pass a Know Your Customer (KYC) check to verify their identity. Presumably, people who claim that they are US residents must provide a sworn statement that they are accredited investors in order to pass this check.

According to Investopedia, a US resident investor can only be deemed “accredited” if they earn over $200,000 per year, have a net worth of greater than $1 million, or are a general partner, executive officer, or director of a company issuing unregistered securities.

These criteria effectively exclude the vast majority of Americans.

Users can bypass this requirement by clicking “I live outside of the United States,” but then they must provide proof of residency outside the US in order to continue.

The fact that many of Trump’s supporters reside in the United States and are not accredited investors is likely a major cause for the token’s sluggish sales.

Under normal circumstances, a requirement like this would be easily bypassed. Crypto users outside the US would buy up the token from the website, and then sell it to US residents via decentralized exchanges.

US residents buying the token would use pseudonymous crypto addresses to identify themselves, making it nearly impossible for the government to figure out whether they were US residents and giving the sellers plausible deniability.

However, this has not happened with Trump’s WLFI token because the token is not transferable.

WLFI is not transferable or tradable

Unlike most cryptocurrencies, WLFI cannot be transferred from one wallet to another. This means that accredited investors cannot sell the token to non-accredited ones, nor can anyone outside of the US sell it to a US resident.

In fact, holders cannot sell the token at all. The only thing they can do with the token is to wait for the DeFi protocol to be released, at which point its developers claim holders will be able to vote on proposals affecting this protocol.

The token sale’s terms and conditions state explicitly that the token cannot be transferred to other users.

WLFI sale terms and conditions. Source: World Liberty Financial.

Not being able to sell the token means that investors can’t profit from selling it at a higher price, nor is there any expectation that tokenholders will receive profits from the upcoming DeFi protocol.

The website crashed

Despite selling only a few hundred million tokens, the website could not handle even this small amount of traffic. Some users reported that they were met with a “this page isn’t working message” when they attempted to buy tokens.

Source: Wazz

Because the site was down, some users may have been prevented from buying WLFI, and after considering their plan, they may have had a change of heart and decided to keep their money instead. This may have further reduced the sale of the token.

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The WLFI team has not explained why the site went down, but they may have expected sales to be even worse than they were. As a result, they may not have prepared enough servers to handle the website’s traffic, causing it to go down and making the situation even worse.

People think it’s a grift

Another cause of the token’s sluggish sales may be the prevailing opinion that the project is a grift or petty scam.

Some observers have stated that they believe the lack of transferability has been deliberately hidden from buyers so as to sell more tokens.

Although the lack of transferability is clearly stated on the token’s website, some believe that the project did not expect buyers to read the fine print.

Trump’s announcement of the token was so controversial on X that it got a community note. The note states, “In the fine print it notes that the ‘token’ is not transferable and is locked in the wallet, so you cannot withdraw until this ‘scheme’ sees fit to allow it. Read the small print!”

Vladimir Djukic, founder of the Reflecto passive-income token, shared the announcement:

Source: Vladimir.

The buying process is tedious

Yet another reason for sluggish token sales may be that the buying process is too frustrating for many would-be investors.

Some may not know whether they are accredited investors, as they may not even know what the term means.

Others may not be sure what “living” in the United States means. If a person visits the US for several months of the year but spends the rest of their time in another country, for example, they may not be sure which button to press.

Even if they make it to the token sale page, they have to first pass a KYC check before moving to the final step of the purchase. Some users may not trust Sumsub, the company that performs the KYC check and may be unwilling to upload their passport or driver’s license.

Even if they are willing to trust the company that does the KYC check, they may simply be unwilling to upload their documents.

The overall tediousness of the buying process may be another reason that many supporters have decided to skip the token sale, even if they believe that the token will somehow pay off in the long run.

Despite the poor token sales, Trump continues to enjoy the support of many in the US crypto community. A Trump-allied political action committee raised over $7.5 million in crypto between July and September, according to data from the US Federal Election Commission.

Trump’s opponent, Vice-President Kamala Harris, is also seen as better for crypto than the current President Joe Biden, according to research from Galaxy Digital.

She has recently attempted to court crypto voters by promising to provide sensible regulations of the asset as part of her “Opportunity Economy pledge.”