WLFI Slides to Fresh Low as World Liberty Prepares Token Unlock Vote; Dolomite Loan Exposure in Focus
WLFI fell to a new low on Friday after World Liberty Financial, a Trump-backed crypto project, said it is preparing a governance proposal that would allow holders to vote on unlocking tokens allocated to early participants.
WLFI was last seen around $0.0800, down about 15% over 24 hours. The token's market capitalization dropped about $427 million to $2.54 billion, from nearly $3 billion.
The move comes as scrutiny intensifies over the project's use of DeFi lending protocol Dolomite. World Liberty defended roughly $150 million in USDC-denominated borrowing on X, pushing back on what it called "FUD" and rejecting claims that the position could leave Dolomite with bad debt if unwound. The project said it is "nowhere near liquidation" and would add collateral if markets moved sharply against it.
World Liberty also argued its activity benefits stablecoin suppliers on Dolomite, saying they are earning elevated yields compared with traditional markets.
Criticism persisted. DeFi commentator DefiIgnas said the project had not explained how it would repay the stablecoin debt, and argued WLFI is too illiquid to sell at scale. He claimed that selling $8.2 million worth of WLFI could result in about 72% slippage.
Arkham Intelligence data added to the debate, showing World Liberty posted about $400 million worth of WLFI as collateral on Dolomite across two wallets—roughly 98% of WLFI supply on the platform—raising concentration and collateral-risk concerns.
WLFI launched last year as a non-transferable token, so an unlock would represent a major structural shift. Token Unlocks estimates about 75% of WLFI supply remains locked. World Liberty said in March it raised $550 million across two WLFI sale rounds involving 85,000 participants.
Token Unlocks data indicates 20% of total supply was allocated through public sales, carrying a paper value of about $2 billion. In a follow-up X post, World Liberty said any proposal would not unlock all tokens at once and would include a long-term vesting and unlock schedule designed with the ecosystem's health in mind.
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