WLFI (WLFI) fell to a new all-time low on Saturday after onchain data showed wallets linked to World Liberty Financial used large token holdings to borrow stablecoins. 

The move added pressure to the Trump-linked project as traders weighed the risk tied to using its own token as collateral.

WLFI dropped to about $0.077, its lowest level on record, before trading near $0.079. The token is now down 76% from its peak of $0.33 reached in September, based on CoinGecko data.

The decline followed reports that wallets tied to World Liberty Financial deposited about 5 billion WLFI tokens on Dolomite. The same position was then used to borrow $75 million in USD1 and USDC.

Arkham data showed that more than $40 million of the borrowed funds later moved to Coinbase Prime. That transfer drew more attention to the project’s financing activity and the size of its exposure.

The market reaction was swift because WLFI is not viewed as a deeply liquid asset. A large collateral position tied to price swings can increase pressure if the token falls further.

Analysts question liquidation risk on Dolomite

DeFi users on X said the structure could create risk for lenders if WLFI moves closer to liquidation levels. Some pointed to the token’s high fully diluted valuation and limited trading depth as a weak point.

“WLFI has almost a $10 billion FDV, but it is not an extremely liquid asset,” wrote one user. “So imagine what would happen if 5% of WLFI’s total supply would suddenly need to be sold to liquidate the position.”

Another user compared the setup to borrowing cash against self-created value. The user said,

“It’s the financial equivalent of printing casino chips, borrowing cash against them, and telling everyone else not to panic because the house still believes in the chips.”

Dolomite remains a smaller player in DeFi lending. DefiLlama ranks it 19th among lending platforms by total value locked, which added more focus to the size of the WLFI-linked position.

World Liberty defends the strategy

World Liberty Financial responded on social media and said its positions remain well above liquidation thresholds. The project described itself as an “anchor borrower” and said the strategy supports yield generation.

The team wrote, 

“Everyday users are earning outsized stablecoin yields right now — at a time when traditional markets are offering very little.” It added, “That’s the whole point.”

The project also said it plans to introduce a governance proposal for early retail holders. The proposal would replace immediate token access with a phased vesting schedule, subject to a community vote.