Trump's World Liberty Financial borrows $75M using its own token as collateral

5 hours ago

Trump family-backed crypto venture World Liberty Financial pledged 5 billion WLFI tokens on Dolomite to borrow $75 million in stablecoins, draining the protocol's USD1 pool.
The WLFI token dropped nearly 10% to a record low, exposing Dolomite to potential bad debt due to forced liquidation risks.
The transaction involved WLFI using its own governance token to borrow its own stablecoin from a protocol advised by a World Liberty Financial insider.
Onchain records show WLFI's treasury deposited USD1 stablecoin as collateral and borrowed USDC, then moved funds to Coinbase Prime.
Dolomite co-founder Corey Caplan is an adviser to World Liberty Financial, raising concerns about insider access and circular economics.
The USD1 pool has a 93% utilization rate, locking depositors' funds until the large borrower repays, and WLFI's limited market depth increases liquidation risk.
In April, WLFI treasury sent 3 billion additional tokens to a proxy wallet, with unclear destination, worth roughly $266 million.

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