The token associated with the Trump family DeFi platform World Liberty Financial (WLFI) has reached new local lows amid growing criticism of the lending model employed by the project team.

Source: CoinMarketCap.

On April 11, the token price plummeted to $0.077, nearly 83% lower than the $0.46 peak reached in September 2025.

Price Pressure

The token's decline followed the revelation of borrowing operations in which the project's treasury raised approximately $75 million in stablecoins (including its own, USD1). The collateral consisted of 5 billion WLFI tokens controlled by the team.

In light of this news, the asset's price dropped by over 10%, and its market capitalization decreased by hundreds of millions of dollars.

Community Concerns

Criticism has focused on the structure of the deal. Commentators point out that the project used billions of tokens as collateral, allowing it to attract liquidity without external capital. This model is referred to as "circular financing," as it essentially involves loans secured by an asset controlled by the borrower.

The company utilized the DeFi lending 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 with a total locked value of $147.6 million. In comparison, the top two protocols, Aave and Morpho, have locked values of $25.3 billion and $7.5 billion, respectively (DeFiLlama).

Users have raised concerns about potential conflicts of interest and the concentration of WLFI liquidity in a relatively small protocol. This creates a critically high dependency of the lender on a single borrower.

Commentators noted the token's limited market depth, given its total market capitalization of $2.5 billion. The need to liquidate even 5% of the total volume could lead to a catastrophic price drop, as one critic emphasized.

Project 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 a "anchor borrower," creating "exceptional" yields for other participants in the protocol.

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. Early investors are expected to gain access to their assets sooner than originally planned.

Recall that in February, the project announced plans to launch the World Swap platform for currency exchange and money transfers.