Key Insights:
- Trump family controls 60% of World Liberty Financial, replacing its co-founders in January.
- World Liberty Financial’s governance structure raises concerns about centralization in DeFi.
- WLF plans to launch USD1, a stablecoin backed by U.S. government securities.
A Reuters report notes that President Donald Trump’s family in January gained control of World Liberty Financial (WLF), a crypto venture that raised over half a billion dollars. The move comes after the company sold governance tokens, known as WLFI, which entitle holders to vote on the project’s direction.
Despite the project’s high profile, World Liberty has yet to launch a public platform, raising questions about its governance structure and future operations.
World Liberty Financial Raised $550M from Governance Token Sales
World Liberty Financial raised $550 million in mid-March by selling its WLFI tokens, a new form of governance token. These tokens grant holders voting rights over changes to the project’s underlying code and future decisions, though they cannot be traded. The majority of the token sales occurred after Donald Trump’s election win in November. This fundraising move helped WLF attract significant attention, but also introduced new governance dynamics.
As part of the restructuring, co-founders Zak Folkman and Chase Herro were removed from control. Website disclosures showed that the Trump family now receives 75% of token-sale revenues and 60% of platform revenues once operational.
Revenue Distribution and Centralization Concerns
The financial arrangement at World Liberty is marked by significant control by the Trump family. As of now, they are entitled to about $400 million in fees from the $550 million raised. After the co-founders receive their share, only 5% of the funds will be allocated to building the platform itself. Experts in the crypto industry have raised concerns about the centralization of this project, particularly given the structure of its governance tokens.
The centralization of World Liberty contrasts with typical decentralized finance (DeFi) projects, which usually offer broader participation for investors. According to a survey of leading DeFi platforms and input from industry experts, World Liberty’s structure is unusual for the sector.
Although the platform remains unreleased, WLF stated its aim to decentralize financial services by removing intermediaries such as banks. However, critics say the current ownership and governance contradict that claim.
World Liberty Financial to Launch USD1 Stablecoin Backed by Treasuries
On Mar. 25, World Liberty announced plans to launch USD1, a dollar-pegged stablecoin backed by short-term U.S. Treasuries, USD deposits, and cash equivalents.
BitGo will manage the stablecoin’s reserves, while BitGo Prime will provide brokerage services. The initial USD1 tokens will be issued on Ethereum and BNB Chain, with plans to expand to other networks.
Test transactions for USD1 were completed on both chains with support from BitGo and Wintermute, indicating early technical development. While this reflects WLF’s ambition to expand in DeFi, its centralized governance model remains a concern.
As WLF moves forward, regulatory clarity, platform development, and transparency will be key to determining its role in the crypto ecosystem.
Disclaimer
In this article, the views and opinions stated by the author or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.
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