World Liberty Financial’s WLFI token has fallen about 12% in the past 24 hours after the Trump-linked crypto firm posted a thread on X defending its lending position on Dolomite, the DeFi protocol whose co-founder advises WLFI.
The thread came in response to CoinDesk’s report that WLFI had deposited its own governance token as collateral, borrowed stablecoins against it, and emptied the lending pool by $1 to the point that other depositors could not withdraw.
WLFI did not dispute the transactions, but rather argued that the position was intentional and beneficial.
“We are one of the largest providers and borrowers in the WLFI markets,” posted Account
The statement that WLFI would add more of its own tokens as collateral to avoid liquidation further highlights, rather than resolves, the concern raised in CoinDesk’s report.
Adding more WLFI to support a WLFI-denominated position on a protocol advised by WLFI’s own advisor is a form of circularity that investors may want to keep track of.
WLFI has defined its role as an “anchor borrower,” saying borrowing generates returns for other users at a time when traditional markets offer little. The team disclosed $65.58 million in open market buybacks of 435.3 million WLFI tokens at an average price of $0.1507 over the past six months, and said a governance proposal to unlock the tokens for early holders would be released next week.
The token is now trading about 48% below the buyback average, meaning WLFI’s own treasury purchases are significantly underwater.
WLFI has now reached its lowest level since its launch in 2025.
Meanwhile, an additional three billion WLFI tokens are in an intermediary wallet after the Treasury transferred them on April 2 and 7. This stash is worth about $234 million at current prices, up from $266 million a week ago.
The math works against WLFI on all sides if these tokens follow the same path to Dolomite. Lower prices mean less borrowing power per token, and depositing more tokens to borrow more stablecoins from an already nearly depleted pool makes it harder for other depositors to cash out. The collateral backing the position becomes even more concentrated in a token that just lost 12% in one day.
