Trump Family-Backed WLFI Borrowed Tens of Millions via DeFi Lender Dolomite, Fueling Conflict-of-Interest Concerns

World Liberty Financial (WLFI), a crypto project co-founded by the Trump family, has carried out multiple overcollateralized borrowing transactions through the DeFi lending protocol Dolomite, prompting market concerns about insider ties, circular financing and liquidity risk, Odaily Planet Daily reported. On-chain data shows WLFI pledged its newly issued stablecoin USD1 and its platform token WLFI as collateral to borrow about $31.4 million in stablecoins. Part of the proceeds was sent to Coinbase Prime, a move believed to be linked to fiat conversion or over-the-counter trading. Potential conflicts have drawn particular scrutiny: Dolomite co-founder Corey Caplan is also an adviser to WLFI. WLFI-related funds now make up roughly 55% of Dolomite's deposit liquidity, sharply increasing concentration risk. Liquidity conditions on Dolomite have also tightened. The utilization rate of the USD1 pool is around 93%, suggesting ordinary depositors may not be able to withdraw funds on demand and could face a lockup risk. Separately, analysts warn that WLFI token liquidity remains thin. A price drop that triggers liquidations could set off cascading sell-offs and credit losses that would ultimately be absorbed by other depositors. On-chain records further show that in early April, WLFI moved about 300 million tokens—worth roughly $266 million—to multiple addresses. The destination and purpose of the transfers remain unclear, and WLFI has not responded so far. (CoinDesk)