WLFI Borrows Large Stablecoin Sum Through Affiliated Protocol Dolomite
World Liberty Financial, a crypto project backed by the Trump family, issues the WLFI governance token. The transaction was conducted through Dolomite, a lending protocol co-founded by one of the project’s advisers. The affiliation and the use of its own token as collateral for financing have raised concerns about conflicts of interest and circular risk.
As of July 19, 2026, World Liberty Financial had deposited 5 billion WLFI as collateral on Dolomite and borrowed $75 million in stablecoins, nearly draining the protocol’s liquidity pool. Despite the team’s defense of the position, WLFI plunged 12% in a single day to a record low. The market has also raised “LUNA 2.0” concerns and warned of a further 20% decline.
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The history behind this eventWorld Liberty Financial Mints $25 Million in USD1 and Burns $3 Million
World Liberty Financial (WLFI) is a Trump family-backed crypto project whose USD1 token is a U.S. dollar-pegged stablecoin. The development follows excessively high fund utilization on the Dolomite lending platform, which had left users unable to withdraw funds, drawing attention to debt repayment and liquidity adjustments.
WLFI minted $25 million worth of USD1 on Monday and burned $3 million worth of the tokens, increasing net supply by about $22 million. The move came days after WLFI said it had repaid $25 million owed to Dolomite and was intended to ease withdrawal and fund-utilization problems.
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