TLDR
- WLFI dropped 12% to its lowest price since its 2025 launch
- World Liberty Financial used its own WLFI token as collateral to borrow stablecoins on Dolomite DeFi
- The borrowing drained Dolomite’s USD1 pool, blocking other depositors from withdrawing funds
- Justin Sun’s frozen WLFI holdings lost over $11 million in value in a single day
- WLFI’s treasury buybacks are now roughly 48% underwater on average
World Liberty Financial’s WLFI token fell around 12% in 24 hours, hitting its lowest price since launching in 2025. The token was trading at approximately $0.0818, extending weekly losses of 15% and monthly losses of 17%.
The sell-off came after CoinDesk reported that WLFI had deposited billions of its own governance tokens as collateral on the Dolomite lending protocol. Against that collateral, the project borrowed tens of millions of dollars in stablecoins, including USDC and its own USD1 token.
On-chain data from Arykham confirmed that a project wallet collateralized 5 billion WLFI tokens on Dolomite, resulting in roughly $75 million in borrowed stablecoins. Shortly after, over $40 million of those borrowed funds were transferred to Coinbase Prime.
Day 44: We're seeing insane levels of crime once again.
Yesterday, Trump family's crypto project deposited 5% of $WLFI's total supply on Dolomite and borrowed $75 million in stablecoins against it.
5% of WLFI's token supply is worth roughly $500M.
Then, just a few hours… pic.twitter.com/ACqGXpvckg
— Ethan DeFi (@EthanDeFi_) April 8, 2026
The borrowing pushed Dolomite’s lending pool to full capacity. That left other depositors temporarily unable to withdraw their funds from the protocol.
World Liberty Responds to Criticism
World Liberty Financial posted a thread on X defending its position. The team called the concerns “FUD” and said the project was “nowhere near liquidation.”
“Even if markets moved dramatically against us, we’d simply supply more collateral,” the team stated. Critics pointed out that adding more WLFI to back a WLFI-collateralized position on a protocol advised by a WLFI advisor deepens the circular risk, rather than resolving it.
We are one of the largest suppliers and borrowers on WLFI Markets.
Yes, we supplied WLFI as collateral and borrowed stablecoins. No, we are nowhere near liquidation — and frankly, even if markets moved dramatically against us, we'd simply supply more collateral. That's not a…— WLFI (@worldlibertyfi) April 9, 2026
The project’s Dolomite co-founder, Corey Caplan, also serves as an advisor to World Liberty Financial, which added to conflict-of-interest concerns raised by analysts.
WLFI disclosed it had spent $65.58 million buying back 435.3 million WLFI tokens at an average price of $0.1507 over six months. With the token now trading near $0.078, those buybacks are roughly 48% underwater.
Justin Sun Takes a Hit
Tron founder Justin Sun saw his frozen WLFI holdings drop by more than $11 million in a single day. Sun originally invested $30 million into World Liberty Financial in late 2024 and later built a position worth around $75 million.
World Liberty blacklisted Sun’s wallet last year after it moved roughly $9 million in WLFI, freezing his tokens. Blockchain analytics firm Bubblemaps estimates Sun now holds around 545 million frozen WLFI tokens worth approximately $45 million — down over $80 million from earlier valuations.
Three billion additional WLFI tokens remain in an intermediary wallet after treasury transfers on April 2 and April 7, currently valued at around $234 million.
The RSI sits near 30, bordering oversold territory, with MACD showing continued bearish momentum. The nearest support level is $0.079, with further downside targets at $0.075 and $0.070 if selling pressure continues.
