World Liberty Financial’s WLFI token fell approximately 12% in the last 24 hours after the Trump-linked crypto firm posted a thread about X defending its credit position in Dolomite, the DeFi protocol whose co-founder advises WLFI.
The thread arose in response to CoinDesk’s report that WLFI had deposited its own governance token as collateral, borrowed stablecoins against it, and depleted the $1 loan fund to the point where other depositors were unable to withdraw it.
WLFI did not dispute the transactions, but instead argued that the position was intentional and beneficial.
“We are one of the largest providers and borrowers of WLFI Markets,” posted account
The statement that WLFI would add more of its own token as collateral to avoid liquidation further highlights, rather than resolves, the concern raised in the CoinDesk report.
Adding more WLFI to back a WLFI-denominated position in a protocol advised by WLFI’s own advisor is a form of circularity that investors may want to follow closely.
WLFI framed its role as an “anchor borrower,” saying that borrowing generates returns for other users at a time when traditional markets offer little. The team revealed $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 tokens for early holders would be published next week.
The token is now trading about 48% below the buyback average, meaning WLFI’s own treasury purchases are significantly below water.
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. That stash is worth roughly $234 million at current prices, up from $266 million a week ago.
The math goes against WLFI on all sides if those 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 fund makes it harder for other depositors to withdraw them. The collateral backing the position is further concentrated in a token that just lost 12% in one day.
