Trump’s WLFI Token: Why Is World Liberty Financial Failing?

Donald Trump’s endorsed World Liberty Financial (WLFI) token is crashing despite his election victory because of the non-transferable nature of its tokens and a lack of economic incentives for investors. 

Donald Trump’s re-election as the new US President has ignited one of the largest crypto bull markets in years. Bitcoin has reached a new all-time high, nearing $90,000. Altcoins like Ethereum and Solana have reached their highest price in over a year, while meme coins are also thriving. Trump’s pro-crypto perspective is driving all of these milestones, as he promised to make US regulations more receptive and favorable for crypto adoption.

Despite the market reaching new highs after the election, one project directly endorsed by the new president-elect is seeing major lows – World Liberty Financial (WLFI). Since October, Donald Trump and his son, Eric Trump, have been active endorsers of this DeFi platform.

Despite not holding any official position or affiliation to this platform, Trump has promoted World Liberty Financial on X (formerly Twitter). These endorsements saw the price of WLFI skyrocket by over 500% in early October. However, since Trump’s win in the 2024 US election, WLFI has slumped by more than 50%.

So, what is World Liberty Financial? Why did Trump endorse this project? And why has the WLFI token declined after the election? Let’s explore.

An overview of World Liberty Financial

The World Liberty Financial (WLFI) token is a governance token associated with the decentralized finance (DeFi) platform World Liberty Financial. According to the project’s website and social media posts, the platform aims to promote the mass adoption of stablecoins and decentralized finance.

Key features of WLFI

• Governance role: WLFI tokens grant holders voting rights on platform proposals, influencing protocol upgrades and technical changes.
• Non-transferability: Post-purchase, WLFI tokens are non-transferable, meaning they cannot be traded or sold on secondary markets.
• No economic rights: These tokens do not provide holders with economic benefits such as dividends or yield.

Donald Trump’s involvement with WLFI

Donald Trump serves as the ‘chief crypto advocate‘ for World Liberty Financial, with his sons — Donald Jr., Eric, and Barron — acting as “web3 ambassadors”.

While the Trump family does not hold formal positions within the company’s board, they are advisors and have been allocated approximately 22.5 billion WLFI tokens. Additionally, they are entitled to receive fees for services provided to the platform.

How did World Liberty Financial become popular?

On 15 October 2024, WLF initiated its public token sale for the WLFI governance token. This event attracted significant attention, with the platform’s website experiencing crashes due to high traffic volumes.

The involvement of former president Donald Trump and his family played a crucial role in WLF’s popularity. Trump’s endorsement and active promotion of the platform, along with his sons’ participation as “web3 ambassadors”, elevated WLF’s profile in both the cryptocurrency community and the general public.

The timing of WLFI’s rise coincided with the 2024 US presidential election, during which Trump positioned himself as a pro-crypto candidate. His advocacy for digital assets and the launch of WLF aligned with his campaign narratives, further amplifying the platform’s visibility.

Why is WLFI down even though Donald Trump won the 2024 US election?

World Liberty Financial (WLF) has encountered several challenges that have impeded its success, despite Donald Trump’s election victory.

• Technical issues during the token sale: Upon launching the WLFI token sale on 15 October 2024, WLF’s website experienced significant technical difficulties, including crashes and outages. These issues were attributed to overwhelming traffic, with reports indicating the site received 72 million unique visits within the first hour. Such disruptions hindered investor participation and undermined confidence in the platform’s reliability.

• Non-transferable nature of WLFI tokens: The WLFI tokens are designed as non-transferable governance tokens, meaning holders cannot trade or sell them on secondary markets. This lack of liquidity has deterred potential investors seeking flexibility and the opportunity to realize returns on their investments.

• Absence of economic benefits: Beyond voting rights on platform proposals, WLFI tokens do not offer economic incentives such as dividends or yield. This absence of financial benefits has made the tokens less attractive to investors looking for tangible returns.

• Limited investor participation: Despite initial claims of over 100,000 accredited US investors being whitelisted, the actual number of participants fell short. Blockchain data revealed that only 5,317 unique wallet addresses held WLFI tokens shortly after the sale commenced.

• Regulatory and legal concerns: The project’s association with Donald Trump has raised questions about potential conflicts of interest and regulatory scrutiny. Critics have expressed concerns that the platform could violate constitutional provisions if foreign governments participate, potentially creating conflicts of interest under a second Trump presidency.

In short, WLF’s struggles can be attributed to technical setbacks, the restrictive nature of its tokens, lack of economic incentives, lower-than-expected investor participation, and regulatory apprehensions. These factors have collectively impeded the platform’s progress, irrespective of the political climate.

Should you invest in World Liberty Financial (WLFI)?

At the current state, investing in WLFI is not advisable, and it warrants careful consideration due to several notable red flags.

As previously mentioned, WLFI tokens are non-transferable, meaning investors cannot trade or sell them on secondary markets. This lack of liquidity limits potential exit strategies and may deter investors seeking flexibility.

Also, a significant portion of WLFI tokens is allocated to insiders: 63% for public sale, 17% for user rewards, and 20% for team compensation. This distribution raises concerns about centralization and potential conflicts of interest.

There are also potential security concerns. The project’s association with individuals linked to previous DeFi ventures that experienced security breaches, such as Dough Finance, raises questions about the team’s ability to ensure platform security.

Given these factors, it’s advisable to conduct thorough due diligence and assess your risk appetite before considering an investment in WLFI.

1. 01.

   What is World Liberty Financial?

   

   World Liberty Financial (WLF) is a decentralized finance (DeFi) platform endorsed by Donald Trump and his family, aiming to promote the mass adoption of stablecoins and decentralized financial services

2. 02.

   Is it safe to invest in WLFI?

   

   Investing in WLFI carries significant risks due to factors such as non-transferable tokens, lack of economic benefits, and potential regulatory scrutiny. Prospective investors should conduct thorough due diligence and consult financial advisors before proceeding

3. 03.

   How much WLFI token does Donald Trump own?

   

   Donald Trump and his family have been allocated approximately 22.5 billion WLFI tokens as part of their advisory roles in the project.

4. 04.

   Is World Liberty Financial founded by Trump?

   

   While Donald Trump and his family are prominently involved as advisors and promoters, they are not the founders of World Liberty Financial. The project was initiated by other individuals, with the Trump family’s involvement focusing on advocacy and advisory capacities.