World Liberty Financial minted 25 million $1 stablecoins Monday morning and burned 3 million via its TokenGovernor contract, according to on-chain data, as the Trump-linked firm continues to deal with the fallout from a lending position that trapped depositors on the DeFi protocol Dolomite.
The activity follows WLFI’s statement last week, issued in response to CoinDesk’s reports on Dolomite transactions, that it had repaid $25 million of the approximately $75 million borrowed against its own governance token.
The company deposited billions of WLFI tokens as collateral and borrowed stablecoins that were partially funneled to Coinbase Prime, pushing Dolomite’s $1 lending pool to near 100% utilization and leaving other depositors unable to fully exit.
Monday’s coin was funded by BitGo Custody and executed via WLFI’s USD1 Mint Authority contract. The burned 3 million USD1 was transferred from an address starting with 0x2ce to the TokenGovernor contract before being sent to the null address, permanently removing the tokens from circulation.
Smaller test transactions of $10, $10,000 and $40,800 in 1 USD were sent to a previously inactive address in the hours before the change, a pattern consistent with wallet verification before larger transfers.
The net effect is a $22 million increase in circulation at $1. Simultaneous creation and burning indicate active management of supply rather than simple expansion.
However, this burn raises its own question of where that $3 million1 came from and why it was withdrawn rather than redeployed.
Stablecoin issuers regularly burn tokens when collateral is redeemed, but WLFI has not disclosed the precise reason.
It is not yet clear whether the new $1 dollar is intended to replenish Dolomite’s loan pool, fund additional treasury operations, or serve another purpose.
WLFI’s governance token has fallen about 15% since CoinDesk first reported the Dolomite transactions on April 9. Dolomite co-founder Corey Caplan is an advisor to World Liberty Financial.
CoinDesk contacted World Liberty Financial for comment in European Morning.
