Trump's DeFi Project Has Only Sold 4.3% of Its Planned Tokens

The WLFI token sale event of World Liberty Financial, a DeFi project with the participation of former President Trump's family, is receiving little attention from crypto investors.

As of 10:00 AM on October 18, 2024, more than 60 hours after the start of the WLFI token sale, the World Liberty Financial project has only recorded 867.64 million tokens in demand, accounting for nearly 4.4% of the total 20 billion tokens planned to be allocated to investors.

With a sale price of $0.015/token, the total amount raised by World Liberty Financial to date is $13 million, at a valuation of $1.5 billion.

This is a disappointing number, especially when World Liberty Financial is the first DeFi project to receive direct support from the Donald Trump family, with the former US President himself promoting the project many times on media channels with hundreds of millions of followers.

Industry experts and analysts have pointed out the reasons for World Liberty Financial's failure. CEO Kathleen Breitman of the Tezos layer-1 blockchain believes that besides Trump's participation, World Liberty Financial has no other strengths to compete with its rivals in the context of the Ethereum lending sector - the field where this project deploys solutions - has been too crowded and has had many big names for many years. Yet World Liberty Financial still gave itself a valuation of up to 1.5 billion USD, a number that is considered quite high compared to the potential and internal strength of the project.

In addition, one of the main reasons why investors are indifferent to the WLFI token is that this project was established in the US, requiring token buyers to KYC their information to verify that they are US citizens in order to participate. Limiting the number of people who can buy the general model token has reduced the heat of the sale.

Not stopping there, to prevent the risk of WLFI being labeled a "securities" by the US Securities and Exchange Commission (SEC), the project also imposed a condition that investors are not allowed to trade the token for 12 months after the sale event, making this an even more unattractive investment when there are many opportunities to make money in the current crypto market.

Rashan Colbert, Chief Legal Officer at dYdX Trading, commented: “Either there must be some special connection, or there must be a new technological breakthrough, or just a funny enough farce, the project needs to possess a core value to attract investors. But many crypto investors have developed an aversion to the continued politicization of the sector and have become sensitive to celebrity monetization models.”

Indeed, one of the most criticized developments in 2024 was the rise of celebrity-backed memecoins, which use their fame to encourage fans to buy tokens, then abandon them and send the token price plummeting.

World Liberty Financial itself had a less than stellar start, with founders Zachary Folkman and Chase Herro abandoning another project called Dough Finance after it suffered a flash loan attack in July 2024 that cost $1.8 million. There have been some reports that World Liberty Financial used source code taken from Dough Finance.

Bitwise Chief Investment Officer Matt Hougan questioned the prospects of World Liberty Financial and the utility of the WLFI token:

“In the DeFi space, utility is paramount. WLFI strikes me as a memecoin masquerading as a utility token. I think there are many people who feel the same way and have decided not to buy the token. Also, DeFi should not be about individualism. A DeFi project built on a celebrity is like mixing oil and water.”

The final point of doubt is that on October 17, World Liberty Financial released a white paper, dubbed the “Gold Paper,” which stated that the Trump family could receive up to 75% of the net revenue generated by the project. In addition, the Trump family was allocated 22.5 billion WLFI, worth $337.5 million based on the token sale price of $0.015.

Gold Paper also revealed that Mr. Trump and his sons will have no responsibility for the project, as they do not hold the position of director, employee, manager or direct operator of World Liberty Financial, but instead only serve as advisors. The project and token are also “non-political in nature and have no connection to any campaign,” despite being launched just one month before the 2024 US presidential election.