World

Liberty

Arkham

World Liberty Financial

Dolomite

<p>World Liberty Financial has dismissed market warnings regarding its borrowing activity on the lending platform Dolomite, labeling concerns over its debt health as “FUD.”</p>
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   <li>On-chain data shows World Liberty Financial deposited 5 billion WLFI tokens on Dolomite to borrow $75 million in stablecoins shortly before a major U.S. foreign policy announcement.</li>
   <li>World Liberty Financial dismissed liquidation concerns as FUD.</li>
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<p>On-chain <a href="https://intel.arkm.com/explorer/address/0x5be9a4959308A0D0c7bC0870E319314d8D957dBB" rel="noopener noreferrer nofollow">data</a> from Arkham reveals that a wallet belonging to the Trump family-backed project deposited approximately 5 billion WLFI tokens into the protocol to secure a $75 million loan in USDC and USD1 stablecoins.&nbsp;</p>
<p>Subsequently, the World Liberty wallet <a href="https://x.com/EthanDeFi_/status/2041905559033569435" rel="noopener noreferrer nofollow">transferred</a> over $40 million to Coinbase Prime just hours after Trump announced a U.S.-Iran ceasefire.</p>
<p>Dolomite was co-founded by Corey Caplan, an advisor to World Liberty; as such, the high concentration of WLFI on the platform has triggered intense scrutiny from DeFi analysts.</p>
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<p>Currently, WLFI tokens represent $428.9 million of the $825.4 million in total assets supplied to Dolomite. This means the project’s native token now accounts for more than half of the protocol’s total liquidity, creating what researchers describe as a significant concentration risk.&nbsp;</p>
<p>DeFi analysts on X warned that if WLFI’s price hits liquidation levels, the lack of market depth could result in massive bad debt for the protocol’s other lenders.</p>
<p>“If that WLFI collateral position ever gets close to liquidation, it’s basically unliquidatable without major losses for lenders,” wrote analyst EthanDeFi.</p>
<p>He pointed to the token’s low liquidity relative to its $10 billion valuation, advising users to withdraw stablecoins from any pools that accept WLFI as collateral.</p>
<h1 class="wp-block-heading" id="world-liberty-calls-fud">World Liberty calls FUD</h1>
<p>In a series of posts on Thursday, World Liberty <a href="https://x.com/worldlibertyfi/status/2042366923497697472" rel="noopener noreferrer nofollow">countered</a> that its presence as an “anchor borrower” actually helps the platform by providing higher yields for other participants.&nbsp;</p>
<p>The team maintained that they have ample resources to defend their position, noting they have repurchased 435 million tokens over the last six months to support the ecosystem.</p>
<p>“We are nowhere near liquidation — and frankly, even if markets moved dramatically against us, we’d simply supply more collateral,” the team stated.&nbsp;</p>
<p>“That’s not a risk. That’s how this works.”</p>
<p>Despite these assurances, WLFI’s price fell 5.6% to $0.86 as the controversy spread, bringing its total decline over the past week to 14%.&nbsp;</p>
<p>The project is now looking toward a <a href="https://crypto.news/world-liberty-financial-unveils-new-governance-model/" rel="noopener noreferrer nofollow">governance vote</a> scheduled for next week to address a long-awaited token unlock for early retail buyers. This plan will involve a structured, phased vesting schedule rather than an immediate release of all tokens.</p>
<p>The team remains firm that the protocol is designed for long-term growth rather than short-term speculation.&nbsp;</p>
<p>“The critics are looking at the wrong thing,” World Liberty added. “We’re building something that compounds.”</p>
<p>Read more: <a href="https://crypto.news/japan-reclassifies-cryptocurrency-as-financial-instrument-in-major-legislative-change/" rel="noopener noreferrer nofollow"> Japan reclassifies cryptocurrency as financial instrument in major legislative change </a></p>

World Liberty addresses risk concerns over 5B WLFI collateral position on Dolomite

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