World

Prime

Liberty

World Liberty Financial

Dolomite

<a href="https://bsc.news/post/world-liberty-financial-wlfi-analysis" rel="noopener noreferrer nofollow">World Liberty Financial (WLFI)</a>, the crypto venture co-founded by the Trump family, has issued a direct rebuttal to allegations of insider access and depositor risk following a CoinDesk report analyzing its transactions on&nbsp;<a href="https://bsc.news/post/decentralized-finance-defi-comprehensive-guide" rel="noopener noreferrer nofollow">DeFi</a> lending protocol Dolomite.&nbsp;
WLFI confirmed it deposited 1.99 billion of its own governance tokens as collateral and borrowed approximately 31.4 million in stablecoins, but disputed the characterization of the position as a risk to the protocol or its users.
Per reports, Dolomite co-founder Corey Caplan serves as an advisor to World Liberty Financial.&nbsp;
<h2 id="span-span-strong-what-did-wlfi-actually-do-on-dolomite-strong-span-span">What Did WLFI Actually Do on Dolomite?</h2>
On-chain records analyzed by CoinDesk, sourced from&nbsp;<a href="https://etherscan.io/token/0xda5e1988097297dcdc1f90d4dfe7909e847cbef6" rel="noopener noreferrer nofollow">Etherscan</a> and&nbsp;<a href="https://intel.arkm.com/explorer/entity/worldlibertyfi" rel="noopener noreferrer nofollow">Arkham</a>, show the transaction sequence began on February 8. WLFI's treasury deposited 14 million USD1, its own dollar-pegged stablecoin, into Dolomite as collateral and borrowed 11.4 million USDC against it. USDC is a separate stablecoin issued by Circle, widely used across DeFi lending protocols.
Minutes after that borrow, 11.45 million USDC moved to a Coinbase Prime deposit address. Two days later, 12.5 million USD1 moved directly from WLFI's treasury to a separate Coinbase Prime address, bypassing Dolomite entirely. Coinbase Prime is an institutional service typically used for converting crypto to fiat currency or for large over-the-counter trades.
The WLFI governance token entered the picture twelve days after the initial transaction:
<ul>
 <li>On February 20, the treasury deposited 890 million WLFI into Dolomite and borrowed 20 million USD1 against it</li>
 <li>On March 24, a further 1.1 billion WLFI was deposited</li>
 <li>In total, 1.99 billion WLFI tokens now sit as collateral inside Dolomite</li>
 <li>Across both transactions, the treasury received approximately 31.4 million in stablecoins</li>
</ul>
In April, activity continued through a separate channel. On April 2, the WLFI treasury sent 2 billion WLFI to a Gnosis Safe proxy wallet at address 0x44a681DD. Five days later, another 1 billion WLFI followed. Neither transfer went directly to Dolomite, and on-chain data does not yet show their destination. At WLFI's current price of $0.0888, those three billion tokens are worth approximately $266 million.
<h2 id="span-span-strong-why-did-the-dolomite-position-raise-concerns-in-the-first-place-strong-span-span">Why Did the Dolomite Position Raise Concerns in the First Place?</h2>
The USD1 lending pool on Dolomite is where the depositor risk question sits. The pool currently shows $193.66 million supplied against $171.22 million borrowed, a utilization ratio of approximately 88%.
In DeFi lending, utilization ratio measures how much of a pool's available liquidity is currently out on loan. At 88%, retail depositors who added USD1 to the pool expecting on-demand withdrawals cannot all exit simultaneously. Their funds remain locked until the large borrower repays.&nbsp;
According to CoinDesk, the USD1 supply rate sits at 16.24% and the borrow rate at 9.18%, figures that reflect a single large actor's borrowing pressure rather than distributed organic demand.
USDC lending rates on Dolomite have spiked to 13.5% as the protocol works to attract fresh liquidity. DeFi analyst Ignas&nbsp;<a href="https://x.com/DefiIgnas/status/2041931046653239706" rel="noopener noreferrer nofollow">flagged</a> this on X as a potential systemic concern, drawing comparisons to conditions that preceded the Stabble protocol's 62% TVL collapse on&nbsp;<a href="https://bsc.news/post/solana-blockchain-ecosystem-deep-dive" rel="noopener noreferrer nofollow">Solana</a>, where similar pressure built gradually before a sudden exit event.
The collateral itself is also a point of contention. WLFI is a governance token with limited secondary market depth relative to the size of the position.&nbsp;
<h2 id="span-span-strong-what-is-wlfi-s-defense-of-the-dolomite-position-strong-span-span">What Is WLFI's Defense of the Dolomite Position?</h2>
WLFI&nbsp;<a href="https://x.com/worldlibertyfi/status/2042366923497697472" rel="noopener noreferrer nofollow">addressed</a> the criticism directly in a public statement, calling the analyst commentary misinformation and framing the position as intentional infrastructure for yield generation.
On liquidation risk, WLFI stated it is "nowhere near liquidation" and that if markets moved significantly against the position, it would "simply supply more collateral." The project described this as standard DeFi practice rather than a vulnerability.
WLFI's core argument is that by acting as the anchor borrower on the protocol, it is generating the yield that makes the platform attractive to other users. In its own words, everyday users are earning above-market stablecoin yields at a time when traditional finance is offering limited returns.
To support its broader financial position, WLFI pointed to several figures:
<ul>
 <li>USD1 is running at a $159.5 million annual revenue run rate</li>
 <li>Over the past six months, the project bought back 435,301,344 WLFI tokens at an average price of $0.1507, totaling $65.58 million in open market purchases</li>
 <li>A governance proposal to unlock locked tokens for early holders is expected to go to a community vote shortly after forum input</li>
</ul>
WLFI also outlined recent technical upgrades to USD1, including gasless transfers allowing AI agents and users to send the stablecoin without holding ETH for gas fees, native support for AI payment protocol infrastructure including MPP and x402, compliance-grade fund safety controls, and a seamless upgrade that carried over all existing balances and integrations without requiring migration.
<h2 id="span-span-strong-conclusion-strong-span-span">Conclusion</h2>
WLFI confirmed it deposited 1.99 billion of its own governance tokens into Dolomite as collateral and borrowed approximately 31.4 million in stablecoins, then disputed the risk framing directly.&nbsp;
The project cited its anchor borrower role as a yield-generating mechanism for other users, pointed to $65.58 million in token buybacks, a $159.5 million USD1 revenue run rate, and upcoming governance proposals for early token holders.&nbsp;
On the other side, the USD1 pool sits at 88% utilization, retail depositor exits are restricted, WLFI's secondary market depth remains limited relative to the collateral position.
<h2 id="span-span-resources-span-span">Resources</h2>
<ol>
 <li><a href="https://www.coindesk.com/markets/2026/04/09/trump-s-world-liberty-financial-borrows-usd75-million-against-its-own-token-trapping-depositors-on-dolomite" rel="noopener noreferrer nofollow">Report by CoinDesk</a>: Trump's World Liberty Financial uses 5 billion WLFI to borrow $75 million from a platform its advisor co-founded</li>
 <li><a href="https://x.com/worldlibertyfi/status/2042366923497697472" rel="noopener noreferrer nofollow">World LibertyFi on X</a>:&nbsp; Post on April 10</li>
 <li><a href="https://app.dolomite.io/stats" rel="noopener noreferrer nofollow">Dolomite stats</a></li>
 <li><a href="https://x.com/DefiIgnas/status/2041931046653239706" rel="noopener noreferrer nofollow">Ignas on X</a>: Post on April 8</li>
</ol>

Trump-Backed WLFI Defends Dolomite Borrow Against Insider Access Allegations

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