World

Liberty

Arkham

April

Dolomite

<h2 id="tldr">TLDR</h2>
<ul>
 <li>World Liberty co-founder Zak Folkman said the $75 million Dolomite loan was small compared to posted collateral.</li>
 <li>Folkman stated that the borrowing aimed to increase utilization and liquidity on Dolomite Markets.</li>
 <li>Onchain data showed that more than $40 million of the borrowed funds moved to Coinbase Prime.</li>
 <li>DeFi analysts raised concerns in April about concentration and liquidation risks tied to the WLFI position.</li>
 <li>Justin Sun filed a lawsuit alleging that World Liberty froze his tokens and restricted governance access.</li>
</ul>
<p>World Liberty co-founder Zak Folkman addressed a $75 million Dolomite borrowing position and a lawsuit from <a href="https://blockonomi.com/trumps-crypto-company-strikes-back-world-liberty-financial-sues-justin-sun-for-defamation/" rel="noopener noreferrer nofollow">Justin Sun</a> at Consensus 2026. He said the loan represented a small share of posted collateral and aimed to increase protocol usage. He also confirmed that World Liberty hired Quinn Emanuel and rejected Sun’s claims as false.</p>
<h2 id="world-liberty-explains-wlfi-and-usd1-loan-activity-on-dolomite">World Liberty Explains WLFI and USD1 Loan Activity on Dolomite</h2>
<p>Folkman said World Liberty acted as the largest liquidity supplier on Dolomite Markets before taking a limited loan. He stated that the team posted about 5 billion WLFI tokens as collateral and borrowed roughly $75 million in <a href="https://blockonomi.com/agentpay-sdk-brings-programmable-payment-rails-to-autonomous-ai-agents-through-usd1/" rel="noopener noreferrer nofollow">USD1</a> and USDC. He described the move as “a very, very small loan” compared with the collateral size, and he said the goal focused on raising utilization rates.</p>
<p>He added that the strategy helped expand liquidity across the protocol over time. Onchain data from Arkham showed that the wallet later transferred over $40 million to Coinbase Prime. However, DeFi analysts on <a href="https://x.com/Naeven_0/status/2042147697646563376?s=20" rel="noopener noreferrer nofollow">X raised</a> concerns in April and warned about concentration and liquidation risks tied to the WLFI-backed position.</p>
<div class="embed-twitter">
 <blockquote class="twitter-tweet">
  <p>anyone trying to chase this yield should know</p>
  <p>recently, wlfi team deposited 5b <a href="https://twitter.com/search?q=%24wlfi&amp;src=ctag&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">$wlfi</a> tokens (worth ~$450m) across two wallets as collateral on dolomite:</p>
  <p>&gt; 0x44a…5fad deposited 3b wlfi and borrowed $50m usd1 + $10m usdc, paying 1.35% apr on the borrowed funds<br>&gt; 0x5be…7dbb… <a href="https://t.co/ifgv6ODo0w" rel="noopener noreferrer nofollow">https://t.co/ifgv6ODo0w</a><a href="https://t.co/9mYLx0hH6q" rel="noopener noreferrer nofollow">pic.twitter.com/9mYLx0hH6q</a></p>
  <p>— Naeven (@Naeven_0) <a href="https://twitter.com/Naeven_0/status/2042147697646563376?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">April 9, 2026</a></p>
 </blockquote>
</div>
<p>Folkman said the borrowing strategy followed internal planning and transparent smart contract rules. He stressed that all contract functions remain visible on Etherscan and other public explorers. He maintained that the position size did not threaten lenders based on posted collateral levels.</p>
<p>He also said the team monitored utilization and liquidity metrics during the borrowing period. He stated that World Liberty reduced its position as liquidity expanded. He reiterated that the company aimed to support growth within Dolomite rather than extract value.</p>
<h2 id="world-liberty-rejects-justin-sun-claims-and-files-defamation-case">World Liberty Rejects Justin Sun Claims and Files Defamation Case</h2>
<p>Folkman also addressed a lawsuit filed by Tron founder Justin Sun in a California federal court on April 22. Sun alleged that World Liberty froze his tokens and excluded him from governance. He also claimed that the <a href="https://blockonomi.com/trump-linked-wlfi-falls-17-after-62b-token-unlock-vote-opens/" rel="noopener noreferrer nofollow">WLFI</a> contract contained undisclosed blacklist features and threatened permanent token burns.</p>
<p>Folkman said World Liberty felt “blindsided” by the filing and denied all allegations. He said the project retained Quinn Emanuel to pursue a defamation case against Sun. He described the matter as “cut and dry” and called Sun’s statements “blatantly false.”</p>
<p>He said the 20% unlock terms appeared clearly in the project’s terms and conditions. He also stated that smart contract features remained publicly accessible on blockchain explorers. He argued that no hidden blacklist functions existed beyond disclosed parameters.</p>
<p>Folkman further said World Liberty faces heavier scrutiny due to its ties to President Donald Trump. He described the connection as both a “blessing and curse” for distribution and growth. He stated that the association accelerated adoption while increasing media and public attention.</p>
<p>The post <a href="https://blockonomi.com/world-liberty-defends-dolomite-loan-denies-sun-claims/" rel="noopener noreferrer nofollow">World Liberty Defends Dolomite Loan, Denies Sun Claims</a> appeared first on <a href="https://blockonomi.com" rel="noopener noreferrer nofollow">Blockonomi</a>.</p>

World Liberty Defends Dolomite Loan, Denies Sun Claims

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