Author | Huo Huo
Produced by｜Baihua 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 affect the market in the future?
01. What is WLFI?
WLFI is a DeFi project supported by Trump and his family (including eldest son Donald Trump Jr., third son Eric Trump, and youngest son Barron Trump). It was officially launched on the Aave V3 platform on the Ethereum mainnet in September 2023.
WLFI is essentially a DeFi platform that supports users to borrow, lend and invest in cryptocurrencies. The founder's vision is to build it into 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 decentralized finance around the world, especially for those who are underserved by traditional banks. The Trump family once called it "the future of crypto DeFi."
WLFI is the governance token of World Liberty Financial. Each token grants its holder one vote in community proposals on the governance platform. However, its initial distribution plan has been adjusted, from more than half used for sales to community and creator rewards, reflecting the 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, that is, it is not transferable after redemption, which means that users cannot trade/exchange/sell WLFI after holding the token. Although this may be changed through governance proposals in the future, it seems that the token will not be tradable for a long time.
Perhaps due to its non-transferability and inability to provide short-term profit opportunities for cryptocurrency investors, WLFI has had low liquidity since its launch on October 15.
It is also worth noting that WLFI is only available to users outside the United States and is not registered with any financial regulator. This means that U.S. residents cannot participate in trading these tokens, which may be considered to circumvent U.S. law enforcement supervision.
Considering its promotion method, to put it more bluntly, WLFI is a project under the influence of Trump that seeks to promote the use of US dollar stablecoins and DeFi applications, aiming to strengthen the position of the US dollar in the DeFi field.
Therefore, we have to explore how the Trump family supports this project.
1) Team members
According to the official information of WLFI, there is a passage that describes itself like this: Inspired by Trump, it promotes the large-scale adoption of stablecoins and DeFi, especially US dollar stablecoins, to ensure the dominance of the US dollar.
Donald Trump himself serves as the project’s “chief cryptocurrency advocate,” 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 owned by Trump) agreed to promote WLFI and granted it the right to use the names and portraits of Trump family members for publicity. In return, WLFI paid Token to DT Marks DEFI LLC and shared part of the net income of the agreement (about 75%).
However, the Trump family has legally circumvented all ties with WLFI. Although WLFI claims to be "the only DeFi platform inspired by Trump", the Trump family's positions as advocates and ambassadors are not real positions involved in management, and there is a small text at the bottom of the official website:
Donald J. Trump, any of his family members, or any director, officer, or employee of the Trump Organization, DT Marks DEFI LLC, or their respective affiliates, is not an officer, director, founder, or employee 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 and is a Trump family OEM product. Unknown traders use the Trump family's reputation to launch products, and the Trump family creates brands and gains profits. This is because such business operations are commonplace for the Trump family. For example, many Trump hotels or buildings named after Trump around the world are in cooperation with Trump in the form of licensing and OEM.
In general, although all kinds of propaganda say that WLFI is inextricably linked to the Trump family, there is actually no legal connection. This may be one of the reasons why people are not very convinced of WLFI.
In addition to the strong support of the Trump family, the WLFI team is composed of experienced encryption practitioners.
According to the official website, WLFI has five founders, among whom Chase Herro and Zak Folkman do not have impressive industry resumes. According to CoinDesk, they launched a tepid DeFi product, Dough Finance, which was hacked in the summer of 2024 and lost $2 million. In addition, WLFI's blockchain director Octavian Lojnita and an anonymous developer also came from the former company Dough Finance. Coindesk's report also showed that the review showed that in the early stages, the code base published on WLFI directly copied the code of Dough Finance, which was later deleted.
However, WLFI stated that their code has been reviewed by multiple auditing companies (such as BlockSec, Fuzzland, PeckShield, Zokyo, etc.) to prove its security.
In addition to Chase Herro and Zak Folkman, the other three co-founders of WLFI are Steven Witkoff and his family (founders Steven Witkoff, Zach Witkoff, and Alex Witkoff). Steven Witkoff is a well-known real estate developer in the United States and a friend of Trump.
In addition, WLFI has an advisory team consisting of venture capitalists, lawyers and blockchain engineers, including Sandy Peng, co-founder of Ethereum second-layer blockchain Scroll, and Luke Pearson, general partner of Polychain Capital.
It can be seen that these advisors have specific technical expertise and market experience, which will help WLFI achieve its long-term goals, especially in promoting US dollar stablecoins and expanding DeFi applications.
2) Recent Developments
Although the entire altcoin market has begun to recover driven by Bitcoin, the sales of WLFI are still not optimistic. Only about a quarter of it has been sold since its launch.
However, there are two things worth noting. First, at the end of November, Tron founder Justin Sun spent 30 million US dollars to configure WLFI Token to show his support for the project, becoming the largest public investor in the project. Then on November 26, Justin Sun was appointed as an advisor to WLFI.
Following the announcement of Justin Sun as an advisory ambassador, on December 18, WLFI announced a partnership with Ethena Labs. The two parties are seeking long-term cooperation, and the initial plan is to start with Ethena's revenue Token sUSDe.
In addition, the most popular are the various altcoins exchanged by WLFI. Every time they are exchanged, they can directly trigger a wave of trading boom.
02. On-chain activities of the WLFI project
According to Spot On Chain monitoring, WLFI has reserved a variety of mainstream and emerging crypto assets through a main wallet address since November 2024. In particular, in December, the cumulative expenditure was close to US$45 million, including ETH, cbBTC, LINK, AAVE, ENA and the latest ONDO, and the total holding value has exceeded US$84.8 million.
Source: https://intel.arkm.com/explorer/entity/worldlibertyfi
According to incomplete statistics, its reserve crypto assets include:
1) ETH
As the world's second largest cryptocurrency platform, Ethereum's status and influence in the industry are self-evident.
WLFI has purchased ETH many times and has spent the most on ETH. It was previously reported that it spent $30 million to reserve 8,105 ETH, with a unit price of about $3,700. The most recent operation was on December 20, when it purchased 722.213 ETH through Cow Protocol for $2.5 million. 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, which aims to introduce the value of Bitcoin (BTC) into blockchain networks such as Ethereum. WLFI spent $10 million to exchange about 103 cbBTC, with an average operation price of $97,181 per coin; subsequently, WLFI exchanged all cbBTC for WBTC holdings.
The move came on the same day that Coinbase announced it was delisting WBTC for failing to meet CEX standards. Coinbase delisted WBTC, and WLFI’s move was seen as support for WBTC.
WLFI’s choice to exchange cbBTC for WBTC may be due to WBTC’s maturity in the market and its infrastructure advantages, or it may be that Justin Sun’s joining as an advisor had an impact on this decision.
Because BiT Global, the custody company owned by Justin Sun, and BitGo, the company behind WBTC, announced a partnership in August this year. In this partnership, the WBTC business was transferred from the original company to BiT Global and Justin Sun.
3) AAVE
AAVE is a decentralized lending protocol based on Ethereum that allows users to deposit and earn interest or borrow crypto assets, which is the protocol that WLFI launched.
WLFI is also very active in investing in AAVE Token and has made multiple allocations. WLFI once exchanged AAVE at a price of $360 per unit for $246,000; exchanged AAVE at a price of $308.4 per unit for $1.25 million; and exchanged AAVE at a price of $297.8 per unit for $1 million. 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 to smart contracts on the blockchain. In simple terms, Chainlink helps blockchains obtain and use external data.
WLFI has also invested frequently in LINK, and has allocated LINK at prices of $34.2, $25.5, and $27, spending a total of about $8 million. Currently, the total amount of LINK held by WLFI is 78,300.
There are reports that WLFI will integrate with Chainlink Oracle to accelerate the adoption of DeFi. Chainlink is the leading data oracle solution on the market. As a DeFi platform, WLFI may need to use Chainlink's oracle service to ensure the accuracy and security of its financial products. Therefore, the purchase of LINK may be to obtain and use Chainlink's services to enhance the functionality and credibility of the platform.
5) ENA
Ethena (ENA) is a decentralized financial platform that ensures the stability of assets 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 spent a total of US$750,000 to reserve 741,687 ENA, with an average operating price of US$1.011 per coin; in addition, at a price of US$500,000, with an average price of 0.98 USDT per coin, it reserved 509,954 ENA and currently holds a total of 741,000 ENA.
However, a spokesperson for WLFI stated that the purchase of ENA Token has no direct relationship with the cooperation with Ethena Labs, but only shows WLFI's confidence in the long-term viability and success of the Ethena network.
6) ONDO
The project behind Ondo is Ondo Finance, an Ethereum-based DeFi protocol that aims to transform traditional liquidity services into tokenized real-world assets and connect crypto assets with the real economy. Its main product is bond RWA. Currently, Ondo has launched four products on Binance Futures, including the US money fund OMMF, Blackrock short-term US Treasury bond ETF OUSG, tokenized notes USDY, and Flux Finance that supports tokenized securities collateral.
For Ondo, WLFI had only one configuration operation, spending a total of US$250,000 to configure 134,000 ONDOs, with an average price of US$1.86 per coin during the operation.
03. What other information was revealed?
It can be seen that the WLFI project has made a lot of on-chain operations recently. The tokens it configures include stablecoins (USDT), mortgage lending, RWA, oracle, and packaged Bitcoin projects, basically covering all categories of on-chain DeFi. In addition to our obvious DeFi asset reserves, we can also see the following points from the project's on-chain activities:
1) Use Safe multi-signature wallet
Safe Multi-Signature Wallet is an asset management tool based on smart contracts. It improves the security of digital assets through a multi-signature mechanism (multiple accounts need to sign together). It supports flexible setting of signing rules. In Safe Multi-Signature Wallet, it can be set to single signature (such as 1/1), where one person can authorize the transaction, or configured to multi-signature (such as 2/3 or 3/5), where the preset number of signatories is required to complete the operation. It is also compatible with a variety of blockchains and token types, and is widely used in team fund management, DAO financial operations, personal asset protection and custody services. It is 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 7 signers, one of which is an active DeFi user.
2) Exchange tokens through Cowswap built into Safe Wallet
On-chain data shows that WLFI has conducted more than 150 transactions through the decentralized exchange CowSwap in less than two months. CoW Swap is the front end of CoW Protocol. As a DEX aggregation protocol that integrates batch transactions (Batch Auctions), trade intentions (Trade Intents) and MEV protection functions, it is deployed on Ethereum and Gnosis and is one of the popular DEXs.
Due to the large amount of exchange of WLFI through its wallet, the price of CoW Protocol's native Token COW soared by more than 30% in 24 hours and more than 80% in 7 days.
3) The considerations behind token selection
Diversified investment portfolio: By allocating tokens in different fields, WLFI can not only reduce the volatility risk of a single asset and capture more market growth opportunities, but also use market heat to enhance capital operation effects.
Enhance the influence of the DeFi ecosystem: Most of these tokens are DeFi core assets. Configuring these tokens will help WLFI expand its layout and influence in the DeFi ecosystem.
Strategic cooperation opportunities: Certain configured specific assets (such as ENA and ONDO) may be considered to cooperate with these projects to enhance their own brand value and market voice.
In general, this is in line with the development goals of the WLIF project, which is to continuously increase influence through various means and build a comprehensive on-chain lending and trading platform.
04. Summary
If the price of BTC has previously climbed from $70,000 to over $100,000 due to the "Trump effect", then the tokens held by WLFI have also been driven by this effect. For example, on December 14, after WLFI configured LINK and AAVE, LINK's floating profit was $299,000 and AAVE's floating profit was $338,000. On December 16, as the news of WLFI's operation spread, the price of ONDO broke through 2.1 USDT, setting a record high, with a 24-hour increase of 16.33%.
Therefore, the market has heard that WLFI’s assets may become a benchmark for the old DeFi, and many people are speculating about what crypto assets WLFI will reserve next?
Some believe that the team supporting the investment advisors is worthy of attention, some believe that the leaders of each track, such as projects with large asset value and high brand value, may become new targets, and others believe that high-quality DeFi assets in the top 100 by market value cannot be ignored.
However, we will have to wait and see what actions WLFI will take next.
