Former President of the United States and Republican presidential candidate, Donald Trump, has officially launched the decentralized finance (DeFi) project World Liberty Financial (WLFI), declaring the arrival of a new financial era in the United States. According to the exposed whitepaper draft in the crypto community, 70% of the governance tokens in the project will be allocated to 'insiders', sparking skepticism among the crypto community.
According to CoinDesk, the new financial project World Liberty Financial, driven by Donald Trump and his sons Eric Trump and Donald Trump Jr., claims to be a model that 'returns financial power to the people' and a solution to the 'manipulated' traditional financial system.
The media has obtained a whitepaper draft of the WLFI project, which reveals that a majority of the power promised by the WLFI team will be concentrated in the hands of a few insiders. 70% of the WLFI governance tokens in the project will be held by founders, team members, and service providers.
According to the current draft, it is likely that Trump has launched a new financial project, but it still operates within the traditional financial system.
(Source: CoinDesk)
(Source: Twitter)
According to the whitepaper, the remaining 30% will be distributed through 'public sales', and some of the funds raised will flow to internal personnel of the project. However, some funds will be kept in the treasury 'to support the operation of the WLFI project'.
The report emphasizes that 'the distribution of 70% of the governance tokens to insiders is unusually high'.
The genesis block of Ethereum reserved a total of 16.6% of the ether for the Ethereum Foundation and early contributors, although co-founder Vitalik Buterin later stated that they received even less share.
Another popular blockchain project, Cardano, had three companies that reserved 20% of the ADA tokens at launch. It is estimated that Satoshi Nakamoto, also known as the 'father of Bitcoin', holds slightly over 5% of the total supply.
When asked if the allocation of 70% of shares to internal personnel was too high, a source providing consulting for early-stage projects replied, 'Hahaha, that's a joke.'
According to a person close to the project, the WLFI team has not yet finalized their plans.
The WLFI statement said, 'The team is working with many contributors, and we are currently not sure which version of the whitepaper you are referring to, but they have not yet finalized their token economics.'
'So far, all the final/approved information we share can be found on WLFI's Twitter and Telegram, which will be the main channels for all announcements.'
Token details in the whitepaper draft were released after CoinDesk's report on WLFI on Tuesday, September 5, which revealed that the project's team includes members of the Trump family and individuals behind the recently hacked crypto application.
The article mentions that the Trump inner circle is quietly selling the 'whitepaper' for the project, which references a financial lending service and the non-transferable token WLFI, and is accused of having ties to the hacked project Dough Finance.
Further reading: Breaking news! The 'white paper' of the Trump family rare exposure: financial lending services, non-transferable tokens...
CoinDesk also reported that the WLFI project will be built on the popular Ethereum-based lending platform Aave.
The allocation of WLFI has raised a question: Is the project trying to use the Trump family's fame to make money, rather than establishing a novel DeFi platform? Historically, most of the proceeds from pre-sales have been reinvested into the projects for their development.
If insiders plan to keep most of WLFI's funds for themselves, how will they fulfill their lofty promises?
One grand promise is to make the USA the 'crypto capital of the world.' In a Telegram post on Wednesday, the WLFI team suggested to skeptics that their 'plan will be self-evident, the smartest people in the crypto field are supporting us, and what is about to happen will make all skeptics think twice.'
The post added: 'Our mission is very clear, to make cryptos and the USA great by promoting the widespread adoption of stablecoins and decentralized finance. We believe that DeFi is the future, and we are committed to making it accessible and safe for everyone to use.'
According to the white paper, 'all WLFI tokens are non-transferable and are locked indefinitely in a wallet or smart contract until the WLFI token is unlocked through a protocol governance process in a manner that does not violate applicable laws.'
The statement continued: 'Each WLFI token purchaser will undergo screening to ensure that no specially designated nationals or other persons sanctioned by the Financial Crimes Enforcement Network (FinCEN) are allowed to purchase WLFI.' CoinDesk explains that the 'Financial Crimes Enforcement Network' seems to erroneously refer to the Office of Foreign Assets Control (OFAC), an office of the U.S. Treasury, which is different from the Financial Crimes Enforcement Network (FinCEN).
Donald Trump has been officially named the "Chief Cryptocurrency Advocate" for the WLFI project, with Eric and Barron Trump serving as Web3 ambassadors. Barron Trump, the 18-year-old son of the former US president, is considered a "DeFi visionary" for WLFI.
Although the Trump family appears to be deeply involved in promoting and launching the project, the white paper deliberately distinguishes the project from any political faction, stating: "WLFI is not owned, managed, operated, or sold by Trump, Trump Organization, any family members, affiliates, or executives. However, they may hold WLFI tokens and receive compensation from World Liberty Finance and its developers. World Liberty Finance and WLFI tokens are not tied to geopolitical factors and have no affiliation with any geopolitical movements."
(Source: Twitter)