Trump-backed WLFI token drops 12% to record lows after team defends multi-million lending position
CoinDesk
The Trump-linked WLFI token hit record lows after the team defended its controversial practice of using its own governance token as collateral for loans.Summary
The World Liberty Financial (WLFI) token fell 12% to all-time lows following the project's defense of its lending practices on the Dolomite protocol. Critics and reports highlighted that WLFI used its own governance tokens as collateral to borrow stablecoins, effectively draining liquidity and creating a circular financial structure. While the team claims these actions are intentional to provide yield for users and prevent liquidation, investors remain concerned by the project's declining token value and the risks associated with its concentrated collateral strategy.
(Source：CoinDesk)