The token of the Trump-associated DeFi platform World Liberty Financial (WLFI) has reached new local lows amid increasing criticism of the project’s lending model.
On April 11, the token’s price plummeted to $0.077, nearly 83% below the $0.46 mark reached in September 2025.
Price Pressure
The token’s decline followed the disclosure of borrowing operations, through which the project’s treasury raised about $75 million in stablecoins (including its own — USD1). The collateral consisted of 5 billion WLFI, controlled by the team.
Following the news, the asset’s price dropped by more than 10%, and its market capitalization shrank by hundreds of millions of dollars.
Community Concerns
Criticism is focused on the structure of the deal. Commentators note that the project used billions of tokens as collateral, allowing it to raise liquidity without additional external capital. This model is termed “circular financing,” as it essentially involves loans backed by an asset controlled by the borrower.
The company utilized the lending DeFi protocol Dolomite, co-founded by Corey Kaplan, who also serves as an advisor to World Liberty Financial.
Dolomite is not among the leaders in the decentralized lending segment, ranking 19th in total value locked at $147.6 million. In comparison, the top two, Aave and Morpho, have $25.3 billion and $7.5 billion, respectively (DeFiLlama).
Users have pointed out the risks of potential conflicts of interest and the concentration of WLFI liquidity in a relatively small protocol. This implies a critically high dependency of the lender on a single borrower.
Commentators highlighted the token’s shallow market depth, with a total capitalization of $2.5 billion. The need to liquidate even 5% of the total volume could catastrophically crash the asset’s price, one critic emphasized.
Project’s Response
World Liberty Financial dismissed the concerns, stating that the collateral position is not at risk of liquidation and will be increased if necessary.
We are one of the largest suppliers and borrowers on WLFI Markets.
Yes, we supplied WLFI as collateral and borrowed stablecoins. No, we are nowhere near liquidation — and frankly, even if markets moved dramatically against us, we’d simply supply more collateral. That’s not a…— WLFI (@worldlibertyfi) April 9, 2026
The team also stated that it acts as an “anchor borrower,” creating “exceptional” returns for other protocol participants.
Additionally, the company announced that in the coming weeks, WLFI investors will be able to vote on a proposal to change the token unlock schedule. It is expected that early investors will gain access to their assets sooner than planned.
Back in February, the project announced plans to launch the World Swap platform for currency exchange and money transfers.