Trump-Backed WLFI Tokens Plummet Amid Insider Loan Concerns

Apr 13, 2026, 2:54 AM

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The WLFI token, the native cryptocurrency of World Liberty Financial (WLF), which is backed by Donald Trump, has experienced a dramatic fall, hitting an all-time low of $0.08 on Friday. This represents an 82% decline from its previous high of $0.46 in September 2024.

The decline in WLFI's value is largely attributed to reports indicating that the company had engaged in substantial lending activities involving its tokens. Corey Caplan, the Chief Technology Officer of World Liberty Financial, reportedly utilized the project's reserve of WLFI tokens to secure loans on Dolomite, a decentralized lending platform he co-founded.

According to blockchain data, World Liberty Financial lent WLFI tokens worth hundreds of millions of dollars to Dolomite, which is currently ranked as the 13th largest lending platform in the crypto space. Following initial reports by CoinDesk about these loans, WLFI's price fell nearly 15%.

The size of the loans has sparked alarm among analysts. Nicolas Vaiman, CEO of Bubblemaps, noted that approximately 5% of WLFI's total supply is now collateralized on Dolomite. If the WLFI token continues to depreciate, this collateral could be at risk of liquidation, which may prompt World Liberty Financial to sell more WLFI tokens to cover the loans, thereby worsening the situation and further depressing the token's price.

In response to these concerns, World Liberty Financial acknowledged its lending activities on social media, attempting to alleviate investor fears by stating that its loan positions were "nowhere near liquidation." The company described itself as the "anchor borrower" of WLFI, asserting that it is generating yields that would enhance the token's market appeal.

Despite the assurances from World Liberty Financial, investor anxiety persists, particularly regarding its borrowing against the USD1 stablecoin. Vaiman pointed out that the amount borrowed has left minimal stablecoin liquidity on Dolomite, complicating withdrawal processes for users who had previously deposited their tokens.

The tumultuous situation surrounding WLFI has also brought to light the involvement of institutional investors. Multiple crypto foundations had reportedly acquired WLFI tokens through swap agreements, and Nasdaq-listed Alt5 Sigma raised $1.5 billion last summer to invest in WLFI, attracting funds from prominent hedge funds such as Point72 and ExodusPoint.

The broader implications of the lending strategy employed by World Liberty Financial could signal not just a structural risk for WLFI but also potential regulatory scrutiny. The decentralized finance (DeFi) landscape is already under the microscope, and such high-profile lending activities could attract attention from regulatory bodies concerned about the stability of crypto assets and the safeguarding of investor interests.

World Liberty Financial has projected confidence in its strategy, stating that even significant market downturns would be manageable as long as they can supply additional collateral. "That's not a risk. That's how this works," the company asserted in its communication.

As the situation develops, the response from investors and regulators alike will be crucial in determining the future trajectory of WLFI and its associated ecosystem. With the token trading at a fraction of its former value, the coming days will be critical for the project as it seeks to restore confidence among its stakeholders.

In conclusion, the challenges facing WLFI highlight the volatile nature of the cryptocurrency market, particularly for tokens tied to high-profile figures and complex lending arrangements. Investors remain on alert as they navigate the uncertainties surrounding this token's future.

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