Author: Revc, Jinse Finance
Foreword
The decentralized finance project World Liberty Financial (WLFI) related to Donald Trump announced that its public sale will be launched on Tuesday (October 15), aiming to raise $300 million at a valuation of $1.5 billion. The involvement of the Trump family has brought a lot of attention to WLFI, but also raised concerns from the outside world about whether the project has political overtones.
WLFI co-founder Zak Folkman recently revealed that since the whitelist registration was opened on September 30, more than 100,000 people have registered. Paxos also announced that its co-founder Rich Teo has joined the WLFI team, responsible for stablecoin and payment business.
World Liberty Financial
Former US President Donald Trump is about to launch a cryptocurrency project called "World Liberty Financial (WLFI)". Trump has always been supportive of cryptocurrencies and has promised to fire the chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, during his presidency, establish a cryptocurrency advisory committee, and formulate clear industry regulatory rules.
Specifically, WLFI is operated by his sons Donald Trump Jr. and Eric Trump. The project provides cryptocurrency lending and investment services through a decentralized platform, and is only open to US investors who meet the KYC requirements.
While Trump's supporters welcome this project, believing it marks his attention and support for cryptocurrencies, the cryptocurrency community has questioned the transparency and decentralization of the project. Prominent figures in the cryptocurrency field, such as Dogecoin founder Billy Marcus, have criticized this project, believing that it may affect Trump's political aspirations.
WLFI's initial plan includes launching a DeFi lending platform on the Ethereum Layer 2 solution "Scroll", supporting transactions in Bitcoin, Ethereum and stablecoins. The lending platform is modeled after Aave, with 7% of the token supply allocated to the Aave DAO to promote governance participation and liquidity provision. Future plans also include developing a stablecoin-centric credit card, integrating with cryptocurrency exchanges, and diversifying the ownership of real-world assets such as hotels and clubs through the platform. WLFI aims to help the US maintain a leading position in the global cryptocurrency field by promoting the large-scale application of stablecoins.
However, the market has concerns about the security of this project, as the two responsible persons of the WLFI project, Zachary Folkman and Chase Hero, previously participated in the "Dough Finance" platform, which was hacked in July 2023, resulting in a loss of more than $2 million. Since WLFI uses code similar to Dough Finance, the security of the project is questioned.
The Dough Finance protocol is based on Aave V3, providing lending, asset management and yield maximization solutions. Its features include automated DeFi smart accounts (DSA), yield amplification mechanisms, and governance through the DOUGH token. However, the design of the platform also has some limitations, such as higher borrowing fees, permanent locking of pre-sale tokens, a centralized governance structure, and strict liquidation thresholds, which may limit the participation of some users.
WLFI Token Sale
The WLFI token sale is scheduled for October 15, 2024, and will only be open to whitelist users, aiming to raise $300 million, accounting for 20% of the total WLFI supply. The fully diluted valuation of the project reaches $1.5 billion. In the total token supply allocation, 63% is for public sale, 17% for user rewards, and 20% for the founding team, advisors and future employees, including the WLF Foundation and affiliates of the Trump Group.
The sale of WLFI tokens is based on SEC Regulation D, specifically Rule 506(c), which allows the sale of unregistered securities to accredited US investors. This means that only certified investors can participate in the token sale, which may limit the participation of the general public.
Although WLFI's governance tokens give holders voting rights, due to the large concentration of tokens in the hands of the team and giants, it does not fully meet the standards of a traditional decentralized cryptocurrency project.
Summary
The WLFI project has obvious political overtones, such as its claim to "help the US maintain a leading position in the global cryptocurrency field". Before the election, the project has received widespread support from the cryptocurrency industry. The investment value of WLFI not only depends on the development of the project itself, but is also a bet on Trump's political fate. If the election results are favorable to Trump, related MEME tokens and WLFI tokens may experience explosive growth.
However, investors should also remain cautious. In the Space live broadcast on the evening of October 14, participants had divergent views on the prospects of the WLFI project. Some were optimistic about the project's innovation and potential market value, but others expressed doubts about the team's background, token distribution, technical implementation, and regulatory compliance. Specifically, the past experience of the team members, the uneven distribution of tokens, the uncertainty of the technology, and changes in US cryptocurrency regulatory policies are potential risks the project may face.
