Key Takeaways
- WLFI plummeted 12% in 24 hours, reaching an all-time low since its debut
- The project utilized its native WLFI tokens as collateral for borrowing stablecoins via Dolomite’s DeFi platform
- This strategy depleted Dolomite’s USD1 liquidity pool, preventing other users from accessing their deposits
- Justin Sun’s locked WLFI position decreased by more than $11 million within 24 hours
- Treasury repurchase operations are currently facing approximately 48% losses
The governance token of World Liberty Financial experienced a sharp 12% decline over a 24-hour period, marking its lowest valuation since the 2025 token launch. Trading activity showed WLFI hovering around $0.0818, compounding a 15% weekly decline and a 17% monthly downturn.
The dramatic price drop followed revelations from CoinDesk detailing how World Liberty Financial pledged billions of its proprietary governance tokens as security on the Dolomite lending platform. Using this collateral, the initiative secured multiple tens of millions in stablecoins, including both USDC and its native USD1 token.
Blockchain intelligence from Arykham verified that a wallet associated with the project locked up 5 billion WLFI tokens on Dolomite, facilitating approximately $75 million in stablecoin loans. Subsequently, more than $40 million of these borrowed assets were moved 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
This borrowing activity maximized Dolomite’s available lending capacity, temporarily preventing other platform participants from accessing their deposited assets.
Project Team Addresses Growing Concerns
World Liberty Financial published a detailed response thread on X, pushing back against what it characterized as misinformation. The organization insisted that liquidation risks were minimal and the position remained secure.
“Should market conditions shift unfavorably, our strategy includes supplying additional collateral,” the team explained. However, skeptics noted that pledging more WLFI tokens to support an already WLFI-backed loan on a platform where a WLFI advisor holds influence creates a problematic self-reinforcing loop rather than mitigating risk.
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
Adding to the controversy, Dolomite’s co-creator Corey Caplan simultaneously serves as an advisor to World Liberty Financial, raising questions about potential conflicts of interest among industry observers.
According to public disclosures, WLFI allocated $65.58 million toward repurchasing 435.3 million tokens across six months, with an average acquisition cost of $0.1507. At current market prices near $0.078, these buyback programs are sitting on approximately 48% unrealized losses.
Major Investor Faces Substantial Losses
Tron blockchain founder Justin Sun witnessed his immobilized WLFI holdings plummet by over $11 million in just one day. Sun initially committed $30 million to World Liberty Financial in late 2024, eventually accumulating a position valued near $75 million.
World Liberty Financial blacklisted Sun’s address last year following an approximately $9 million WLFI transfer, effectively freezing his token holdings. According to blockchain analytics platform Bubblemaps, Sun currently possesses roughly 545 million frozen WLFI tokens valued at approximately $45 million — representing more than $80 million in losses from peak valuations.
An additional 3 billion WLFI tokens remain held in an intermediary address following treasury movements on April 2 and April 7, presently valued at roughly $234 million.
Technical indicators show the RSI approaching 30, nearing oversold conditions, while MACD signals persistent bearish momentum. Immediate support appears at $0.079, with potential further declines targeting $0.075 and $0.070 if downward pressure intensifies.
