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>>WLFI drops 13% to historic lows as worries about World Liberty Financial’s liquidation mount.

WLFI drops 13% to historic lows as worries about World Liberty Financial’s liquidation mount.

crypthub

about 11 hours ago

Token Decline and Market Reaction

World Liberty Financial’s WLFI token fell about 13% in 24 hours, reaching a new low of $0.080. The drop follows online reports highlighting the firm’s leverage and collateral use. Social media users linked the fall to fears of potential liquidation. This price movement intensified scrutiny of WLFI’s financial structure.

Borrowing Activity and Collateral Concerns

Reports claim WLFI posted roughly 5 billion tokens as collateral and borrowed $75 million in stablecoins from decentralized lender Dolomite. Over $40 million of the borrowed funds were allegedly transferred to Coinbase Prime. Critics note that WLFI dominates more than 50% of Dolomite’s liquidity, raising worries that a price decline could jeopardize collateral safety and trigger forced actions.

Company’s Defense and Strategic Position

World Liberty Financial responded that it is a major supplier and borrower on WLFI Markets and is “nowhere near liquidation.” The firm said it would add more collateral if markets move dramatically, framing borrowing as an anchor strategy to generate yield. It argues that this levered approach is built into the system, not a risk of token dumping.

Governance Plans and Future Outlook

The company announced a governance proposal to unlock locked tokens, with community input and a formal vote slated for next week. It highlighted compliance‑grade controls for its USD1 stablecoin, promising seamless upgrades without balance disruptions. World Liberty dismissed critics as “FUD,” emphasizing a focus on long‑term compounding outcomes.