Author: Revc, Golden Finance

Preface

Decentralized finance project World Liberty Financial (WLFI) related to Donald Trump announced that its public sale will start on Tuesday, October 15th, aiming to raise 0.3 billion USD with a valuation of 1.5 billion USD. The involvement of the Trump family has brought a lot of attention to WLFI, but also raised concerns from the public about whether the project has political implications.

WLFI co-founder Zak Folkman recently revealed that over 100,000 people have registered since the whitelist registration opened on September 30th. Paxos announced that its co-founder Rich Teo has joined the WLFI team, responsible for stablecoins and payment operations.

World Liberty Financial

Former U.S. President Donald Trump is set to launch a cryptocurrency project called "World Liberty Financial (WLFI)". Trump has been supportive of cryptocurrencies and pledged to dismiss the chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, during his presidential term, establish a cryptocurrency advisory committee, and create clear industry regulatory rules.

Specifically, WLFI is operated by his sons Donald Trump Jr. and Eric Trump. The project offers cryptocurrency lending and investment services through a decentralized platform, open only to U.S. investors who meet KYC requirements.

While supporters of Donald Trump welcome this project, seeing it as a sign of his attention and support for cryptocurrencies, the internal cryptocurrency community has raised questions about the transparency and decentralization of the project. Prominent figures in the cryptocurrency field, such as Dogecoin founder Billy Marcus, have criticized this project, believing that it may impact Trump's political ambitions.

WLFI's initial plans include launching a DeFi lending platform on the Ethereum layer two solution 'Scroll,' supporting the trading of Bitcoin, Ether, and stablecoins. Modeled after Aave, the lending platform will allocate 7% of token supply to Aave DAO to facilitate governance participation and liquidity provision. Future plans also involve developing a stablecoin-centric credit card, integrating with cryptocurrency exchanges, and enabling ownership of real-world assets like hotels and clubs through the platform. WLFI aims to help the USA maintain a leading position in the global cryptocurrency field by promoting the extensive use of stablecoins.

However, there are concerns in the market about the security of this project because WLFI's executives, Zachary Folkman and Chase Hero, were previously involved in the 'Dough Finance' platform, which suffered a hack in July 2023, resulting in a loss of over 2 million USD. Due to WLFI's use of similar code to Dough Finance, the security of the project is being questioned.

The Dough Finance protocol, based on Aave V3, offers solutions for lending, asset management, and yield optimization. It features automated DeFi Smart Accounts (DSA), yield multiplier mechanism, and governance through the DOUGH token. However, the platform's design also has limitations such as high borrowing costs, permanent lockup of presale tokens, centralized governance structure, and strict liquidation thresholds, which may restrict some users' participation.

WLFI Token Sale

The WLFI token sale is scheduled for October 15, 2024, targeting only whitelisted users, aiming to raise 300 million USD, which accounts for 20% of WLFI's total supply. The fully diluted valuation of the project reaches 1.5 billion USD. In the total token supply allocation, 63% is for public sale, 17% for user rewards, and 20% allocated to the founding team, advisors, and future employees, including entities like the WLF Foundation and Trump Group's affiliates.

The sale of WLFI tokens is based on SEC's Regulation D, specifically Rule 506(c), allowing the sale of unregistered securities to qualified US investors. This means that only accredited investors can participate in the token sale, potentially limiting the involvement of the general public.

Although the governance token of WLFI gives holders voting rights, the concentration of a large number of tokens in the hands of the team and giants makes it not fully compliant with traditional decentralized crypto project standards.

Summary

The WLFI project has a clear political color, such as its claim to "help the USA maintain a leading position in the global cryptos field." Before the election, the project received widespread support from the crypto industry. The investment value of WLFI depends not only on the development of the project itself, but is more like a bet on the political fate of Trump. If the election results favor Trump, related MEME tokens and WLFI tokens may experience explosive growth.

However, investors should also exercise caution. During a Space livestream on the evening of October 14th, there were differing opinions on the prospects of the WLFI project among participants. Some are optimistic about the project's innovation and potential market value, but others have raised doubts about team backgrounds, token distribution, technical implementation, and regulatory compliance. Specifically, past experiences of team members, uneven token distribution, technical uncertainties, and changes in USA cryptos regulatory policies are all potential risks that the project may face.