Frax Finance has proposed to invest $5 million in World Liberty Financial (WLFI) with a plan to increase the total investment to $10 million if the collaboration is successful.
Frax Finance proposes to invest $5 million in World Liberty Financial
On January 23, the DeFi project FRAX Finance has proposed an initial investment of $5 million in World Liberty Financial (WLFI), which is advised by the Trump family, in order to strengthen FRAX's position in the DeFi ecosystem and expand the accessibility of the frxUSD stablecoin to millions of users.
New governance proposal was just posted 👀 🇺🇸 @worldlibertyfi https://t.co/gGTbl4owWd
— Frax Finance ¤⛓️¤ (@fraxfinance) January 22, 2025
This proposal from FRAX Finance is divided into two specific phases:
- Phase 1: FRAX will invest $5 million in WLFI Tokens, establishing a strategic partnership between the two parties.
- Next phase: If the initial collaboration targets are successfully met, FRAX will consider investing an additional $5 million, bringing the total capital to $10 million.
FRAX Finance expects this investment to bring strategic benefits, including:
- Integrating frxUSD as a collateral asset in the WLFI ecosystem, allowing FRAX to reach millions of users in the US.
- Owning WLFI Tokens will enable FRAX to participate more deeply in the strategic decisions of this platform.
- The token price in WLFI's presale has increased from $0.015 to $0.05 over time. FRAX expects this investment to generate high returns if WLFI continues to achieve its expansion and development goals.
- Collaborating with WLFI is a golden opportunity for FRAX to elevate its position and establish its reputation.
In the next phase, FRAX will conduct a community survey to collect user feedback to refine and finalize the proposal. Then, an online vote will be held to decide whether the proposal is approved.
However, this proposal has faced significant opposition from the FRAX community. User Tony239525 is concerned about the financial risk of investing $5 million in a project with a $5 billion FDV that has not yet achieved significant accomplishments, and believes the funds should be used more effectively for collaborations with reputable projects or marketing campaigns. Additionally, the selling pressure on the FXS token from this investment could significantly damage the value of FXS, so Frax should focus on sustainable initiatives aligned with its long-term vision.
User Tony239525's feedback on the proposal
User lucyna, on the other hand, believes that Frax Finance is not financially strong enough to invest $5 million in WLFI. Instead, lucyna proposes additional conditions for the investment, including:
- Deploying WLFI on Fraxtal.
- Token swaps between FXS and WLFI.
- Listing additional sfrxETH as a collateral asset on WLFI.
User Lucyna's feedback on the proposal
On the World Liberty Financial side, the DeFi project backed by the Trump family will serve as a crypto bank, allowing investors to deposit and borrow crypto assets and earn interest on the platform. With the support of the Trump administration, WLFI aims to bring millions of Americans access to high-quality DeFi products. Some of WLFI's recent notable achievements include:
- WLFI has invested over $350 million in crypto projects in recent times, with the latest investments carrying symbolic significance by referencing the number 47 to celebrate the event of Donald Trump becoming the 47th President of the United States. These investments have focused on top market tokens such as Ether (ETH), Wrapped Bitcoin (WBTC), Tron (TRX), Chainlink (LINK), Aave (AAVE), and Ethena (ENA).
- Completed the presale of 20 billion WLFI Tokens, raising $300 million and selling an additional 5% of the total token supply.
- Announced strategic partnerships with projects like Chainlink and Ethena Labs.
Compiled by Coin68
