Trump's victory in the U.S. presidential election propelled Bitcoin to break through the $100,000 mark, accelerating this round of the bull market. Not only Bitcoin but also projects associated with the Trump team are 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., triggering a following trend in the market, making it an undeniable barometer in the crypto investment market.
So, what is WLFI, and what market-moving actions might it take in the future?
01 What is WLFI?
WLFI is a DeFi project supported by Donald Trump and his family (including his eldest son, Donald Trump Jr., his third son, Eric Trump, and his 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 in borrowing, lending, and investing 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, thereby 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, granting each token holder one vote in community proposals on the governance platform. However, its initial allocation plan has undergone adjustments, shifting from previously allocating over 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. This implies that users cannot trade/swap/sell WLFI after holding the token. Although changes may be proposed in the future, currently, the token cannot be traded for a long time.
Perhaps due to its non-transferability and inability to provide short-term profit opportunities for cryptocurrency investors, WLFI has seen low liquidity since its launch on October 15.
It is also worth noting that WLFI is only available for participation by users outside of 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 to avoid scrutiny from U.S. law enforcement.
Moreover, considering its promotional methods, it can be said more straightforwardly that WLFI is a project 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 necessary 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 large-scale adoption of stablecoins and DeFi, especially dollar stablecoins, to ensure the dominance of the dollar.
Donald Trump himself serves as the 'Chief Cryptocurrency Advocate' of the project, while his son 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) agrees to promote WLFI and grants it the right to use the names and images of Trump family members for advertising 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 has legally distanced itself from any connection to 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 management positions, and there is a small note at the bottom of the official website.
Donald J. Trump, any family member, or any director, officer, or employee of Trump Group, DT Marks DEFI LLC, or any of their respective affiliates, is not a manager, director, founder, or employee of WLFI or its affiliates... World Liberty Financial and its WLFI Token are not political in nature and do not constitute a part of any political campaign.
2) Development status
Although the entire altcoin market has begun to recover under the influence of Bitcoin, WLFI's sales remain pessimistic, having sold only about a quarter since the launch.
However, two things are noteworthy; first, at the end of November, Tron founder Justin Sun 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, Justin Sun was appointed as an advisor to WLFI.
Following the announcement of Justin Sun as an advisor ambassador, on December 18, WLFI announced a partnership with Ethena Labs, with both parties seeking long-term collaboration, starting with Ethena's yield token sUSDe.
In addition, the most noteworthy 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, WLFI has reserved multiple mainstream and emerging crypto assets through a main wallet address since November 2024, especially in December, with cumulative expenditures close to $45 million, including ETH, cbBTC, LINK, AAVE, ENA, and the latest ONDO, with a total holding value exceeding $84.8 million.
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 frequently acquired ETH, spending the most on ETH. Earlier reports indicated that it reserved 8,105 ETH for $30 million, with a unit price of approximately $3,700. The most recent operation occurred on December 20, when it acquired 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, aimed at bringing the value of Bitcoin (BTC) onto blockchain networks such as Ethereum. WLFI spent $10 million to exchange for approximately 103 cbBTC, with an average price of $97,181 per token; subsequently, WLFI converted all cbBTC into WBTC.
This move occurred on the same day Coinbase announced the delisting of WBTC due to non-compliance with CEX standards. WLFI's action was seen as support for WBTC.
WLFI's choice to exchange cbBTC for WBTC may be due to considerations of WBTC's market maturity and infrastructure advantages, or possibly influenced by the involvement of Justin Sun as an advisor in this decision.
Because Justin Sun's custody company BiT Global and the company behind WBTC, BitGo, announced a partnership in August this year, during which the WBTC business was transferred from the original company to BiT Global under Justin Sun.
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 how WLFI leverages the launched protocol.
WLFI has also been active in investing in AAVE tokens, having made multiple configurations. WLFI previously exchanged for AAVE at a price of $246,000 for AAVE priced at $360; it also exchanged $1.25 million for AAVE priced at $308.4; additionally, it exchanged $1 million for AAVE priced at $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 frequent, having configured LINK at prices of $34.2, $25.5, $27, and others, spending a total of approximately $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. Chainlink is currently the leading data oracle solution on the market. As a DeFi platform, WLFI may need to utilize Chainlink's oracle services to ensure the accuracy and security of its financial products. Therefore, purchasing LINK may be to acquire and use Chainlink's services, enhancing 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 provides efficient trading, liquidity mining, and DeFi integration, aiming to offer stable and transparent financial services for crypto assets.
WLFI has spent a total of $750,000 to reserve 741,687 ENA tokens, with an average price of $1.011 per token; additionally, it reserved 509,954 ENA tokens for $500,000, averaging $0.98 USDT per token, currently holding a total of 741,000 ENA tokens.
However, a spokesperson for WLFI stated that the purchase of ENA Token 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 transforming traditional liquidity services into tokenization of real-world assets, connecting crypto assets and the real economy. Its flagship product is the RWA bond. Currently, Ondo has launched four products on Binance Smart Contracts, including the US Money Market Fund OMMF, Blackrock's Short-Term US Treasury ETF OUSG, the tokenized note USDY, and Flux Finance, which supports tokenized securities collateral.
For Ondo, WLFI had a one-time configuration operation, spending a total of $250,000 to configure 134,000 ONDO tokens, with an average price of $1.86 per token at the time of the operation.
03 What other information has been revealed?
It can be observed that WLFI has made many on-chain operations recently, and the tokens it has configured include stablecoins (USDT), collateralized lending, RWA, oracles, and wrapped Bitcoin projects, essentially covering all categories of on-chain DeFi. Beyond the obvious DeFi asset reserves, we can also see the following points from the project's on-chain activities:
1) Adoption of Safe multi-signature wallets
Safe multi-signature wallets are asset management tools based on smart contracts that enhance the security of digital assets through a multi-signature mechanism (requiring multiple accounts to sign). They support flexible signing rules; in a Safe multi-signature wallet, it can be set to single-sign (e.g., 1/1), where one person can authorize a transaction, or configured as multi-sign (e.g., 2/3 or 3/5), where a preset number of signers must be met to complete the operation. It is also compatible with various blockchain and token types and is 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.
WLFI's on-chain operation's Safe multi-signature wallet has a total of 7 signers, including one active DeFi user.
2) Token exchange through the built-in Cowswap in 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 CoW Protocol, functioning as a DEX aggregation protocol that integrates 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 extensive exchanges through its wallet, the native token COW of CoW Protocol saw its price surge over 30% within 24 hours, and it increased by more than 80% within 7 days.
3) Metrics behind token selection
Diversified portfolio: By configuring tokens from different sectors, WLFI can reduce the volatility risk of a single asset, capture more market growth opportunities, and enhance capital operation effects by leveraging market enthusiasm.
Enhanced influence in the DeFi ecosystem: Most of these tokens belong to core DeFi assets, and the configuration of these tokens helps WLFI expand its layout and influence in the DeFi ecosystem.
Strategic collaboration opportunities: Certain specific assets configured (such as ENA and ONDO) may be based on considerations for collaboration with these projects, thereby enhancing its brand value and market voice.
Overall, this aligns well with WLFI's development goals, which aim to continuously enhance 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 influenced by this effect. For example, on December 14, after WLFI configured LINK and AAVE, the floating profit on LINK holdings was $299,000, and on AAVE it was $338,000. On December 16, with the spread of news about WLFI's operations, the price of ONDO broke through $2.1 USDT, reaching a historical high with a 24-hour increase of 16.33%.
Thus, there are rumors that WLFI's assets may become a barometer for established DeFi and speculation abounds regarding which crypto assets WLFI will next reserve.
Some believe that the team backed by investment advisors is worth noting, while others think that leading projects in various sectors, such as those with high asset values and brand values, may become new targets. Still, others believe that quality DeFi assets within the top 100 market cap should not be overlooked.
However, what actions WLFI will take next remains to be seen.
