The WLFI token has dropped to $0.077, an 83% decline since its peak, amid criticism of its lending model and liquidity issues.
The token linked to World Liberty Financial (WLFI), associated with the Trump family, has seen its price fall to a new low, reaching $0.077 on April 11. This marks an 83% decline from its peak of $0.46 in September 2025, amid increasing scrutiny of the platform’s lending practices.
The drop in value followed the disclosure that the project's treasury had borrowed around $75 million in stablecoins, backed by 5 billion WLFI tokens controlled by the team. This revelation triggered a more than 10% decline in the token's price and a significant reduction in its market capitalization by hundreds of millions.
Concerns Over Lending Model
Critics have raised alarms about the project's lending approach, which employs a model known as "circular financing." This method allows the team to secure liquidity using tokens they control, without relying on external funding. The borrowing was facilitated through the DeFi lending platform Dolomite, co-founded by Corey Kaplan, an advisor to WLFI.
Dolomite currently ranks 19th among decentralized lending protocols, with a total locked value of $147.6 million, far behind leaders Aave and Morpho, which boast $25.3 billion and $7.5 billion, respectively. This limited market depth has led to concerns regarding potential conflicts of interest and the heavy reliance on a single borrower for liquidity.
Market observers noted that the total market capitalization of WLFI stands at $2.5 billion, suggesting that liquidating even a small fraction of the token could result in a drastic price drop.
WLFI's Position
In response to the mounting criticism, WLFI has assured investors that their collateral position is secure and can be bolstered if needed. The team emphasized their role as a significant supplier and borrower in the WLFI Markets, stating that they are not at risk of liquidation. They further claimed that their activities create exceptional yields for other protocol participants.
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.
— WLFI (@worldlibertyfi) April 9, 2026
Additionally, WLFI plans to allow investors to vote on a proposal to adjust the token unlock schedule, enabling early investors to access their assets sooner than initially expected. Earlier this year, the project also announced intentions to launch the World Swap platform for currency exchange and money transfers.
