World Liberty defends borrowing position on Dolomite, dismisses liquidation concerns as ‘FUD’

World Liberty Financial, a crypto project backed by the Trump family, has responded to concerns about potential liquidation risks related to its substantial borrowing on the lending protocol Dolomite. The project deposited approximately 5 billion WLFI tokens as collateral to borrow $75 million in stablecoins, with over $40 million transferred to Coinbase Prime. DeFi researchers have warned that this large collateral position poses a risk to other lenders on Dolomite, especially if WLFI's price drops significantly. World Liberty Financial dismissed these concerns as 'FUD' (Fear, Uncertainty, and Doubt), stating they are far from liquidation and can supply more collateral if necessary. They also highlighted their role as an 'anchor borrower' on Dolomite, which they claim generates higher yields for lenders, and expressed confidence in WLFI by noting recent token repurchases. Additionally, World Liberty teased an upcoming token unlock event for early participants, emphasizing a phased approach for long-term ecosystem health.

(Source：The Block)