WLFI Price Plummets to Record Low Amid Token-Backed Loan Controversy

WLFI, a cryptocurrency tied to the Trump-linked project World Liberty Financial, has hit an all-time low after market participants questioned its financial practices. Onchain data showed that wallets linked to the company used over 5 billion WLFI tokens to borrow stablecoins on Dolomite.

The move added pressure to the project as traders weighed the risks associated with using its own token as collateral. WLFI's price fell to around $0.077, its lowest level on record, before trading near $0.079.

According to CoinGecko data, the token has lost 76% of its value since reaching a peak of $0.33 in September. The decline followed reports that wallets tied to World Liberty Financial deposited about 5 billion WLFI tokens on Dolomite and used them to borrow $75 million in USD1 and USDC.

The same position was then transferred to Coinbase Prime, drawing attention to the project's financing activity and its exposure. DeFi users raised concerns about the structure of the loan, comparing it to borrowing cash against self-created value, which they said could create risks for lenders if WLFI moves closer to liquidation levels.