The borrowing brought the $1 pool to 93% utilization, meaning that retail depositors who had lent $1 to the fund expecting to withdraw it at will were unable to do so until the loans were repaid. WLFI redeemed $25 million of the position and then minted $25 million in new dollars a day later, actively managing the supply of the token until April. World Liberty Financial did not respond to a request for comment on the report.
World Liberty is also in litigation with Justin Sun, the cryptocurrency magnate and one of the first buyers of WLFI governance tokens, who sued the company, alleging that it improperly froze his holdings. WLFI filed a countersuit for defamation.
Some observers said the business impact of Sunday’s event is straightforward.
“Paying fighters in the $1 stablecoin would serve the same economic function as writing them a check,” Todd Phillips, a crypto expert at the Klaros Group, told The Guardian. “Announcing to the world that they are doing it at $1 sounds like they are announcing to the world that the dollar is available and that it is connected to the UFC and the White House.”
The circulating supply of USD1 has increased to around $4.6 billion from $3.3 billion on January 1.
The company has also applied for a banking license from the Office of the Comptroller of the Currency.
