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Trump-backed WLFI token drops 12% to record lows after team defends multi-million lending position
World Liberty Financial responded to CoinDesk’s reporting by saying it would “simply supply more collateral” if markets moved against it, a statement that did not reassure holders.
Updated Apr 10, 2026, 1:36 p.m. Published Apr 10, 2026, 1:14 p.m.
What to know:
- World Liberty Financial’s WLFI token fell 12 percent to its lowest level since its 2025 launch, after the Trump-linked crypto venture defended a controversial lending strategy on the Dolomite DeFi platform.
- The firm acknowledged using its own governance token as collateral to borrow stablecoins and drain Dolomite’s USD1 pool, arguing it is an “anchor borrower” that generates yield for others and can avoid liquidation by posting more WLFI.
- Critics say the plan deepens a circular risk loop, as falling WLFI prices erode borrowing power, concentrate collateral in a sliding token and worsen withdrawal constraints for existing Dolomite depositors, while WLFI’s treasury buybacks are now significantly underwater.
WLFI did not dispute the transactions but instead argued that the position was intentional and beneficial.
“We are one of the largest suppliers and borrowers on WLFI Markets,” the X account posted. “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.”
The statement that WLFI would add more of its own token as collateral to avoid liquidation further highlights, rather than resolves, the concern raised in CoinDesk’s reporting.
Adding more WLFI to back a position denominated in WLFI on a protocol advised by WLFI’s own advisor is a form of circularity that investors may want to keep track of.
