Trump-Backed DeFi Project Seeks $250M After Achieving Token Sale Milestone

World Liberty Financial (WLFI), a decentralized finance (DeFi) project reportedly backed by Donald Trump, has announced a new fundraising push. This comes after the project sold 20 billion WLFI tokens, marking 20% of its total supply, mere hours before the former President’s inauguration.

In a statement on their social media platform, WLFI celebrated reaching this milestone, stating:

“Due to massive demand and overwhelming interest, we’ve decided to open up an additional block of 5% of token supply.”

The new token tranche is priced at $0.05 per token. If fully subscribed, this could generate another $250 million, a portion of which is earmarked for Trump and associated stakeholders.

The Trump Effect on Crypto: BitGalactic’s Analysis

The WLFI token frenzy comes amid broader market attention spurred by the official Trump memecoin, TRUMP, which launched on January 18. Initially soaring to a market cap of $15 billion, TRUMP remains valued at approximately $11 billion—a figure surpassing prominent DeFi tokens like Uniswap and Aave.

BitGalactic notes that the political connections and speculative hype surrounding the Trump-linked tokens highlight a recurring theme in crypto markets: the value of perception over fundamentals. While TRUMP’s limited tradable supply (20%) has driven scarcity-driven demand, the project’s longer-term viability remains uncertain, especially given its concentration of ownership. CIC Digital LLC and Fight Fight Fight LLC hold the remaining 80% of the TRUMP token supply, valued at $43 billion.

World Liberty Financial: What’s Behind the Hype?

World Liberty Financial is an Ethereum-based DeFi protocol that aims to enable lending, borrowing, and the issuance of a stablecoin. However, the project remains in its pre-launch phase, raising questions about the valuation of its token and its ability to deliver on its promises.

Initially planning to sell 35% of its 100 billion token supply, the project scaled this down to 20%. Despite this adjustment, the token sale struggled in its early days. Between its October 15 launch and late November, only 766 million tokens were sold, raising $11 million.

The turning point came when Justin Sun, founder of Tron, made a $30 million investment in WLFI tokens in November. Sun later increased his investment to $75 million, positioning himself as the project’s largest backer.

BitGalactic highlights that such high-profile endorsements can act as a double-edged sword. While they bring credibility and attention, they also concentrate influence within a few players, potentially undermining the decentralized ethos of DeFi.

Controversy Surrounding WLFI Tokens

Unlike typical DeFi governance tokens, WLFI tokens are explicitly non-tradable. According to the project’s terms:

“You should think of your purchase of Tokens like other non-refundable purchases of goods and services… You have no expectation of resale of the Token.”

BitGalactic observes that this restriction could be a deliberate attempt to sidestep regulatory scrutiny from the U.S. Securities and Exchange Commission (SEC). The SEC has previously classified token sales as securities offerings, which could complicate WLFI’s operations.

Speculation abounds that Trump’s influence as a potential legislator might lead to regulatory changes, paving the way for WLFI’s tokens to become tradable in the future. This possibility could be fueling speculative demand among supporters and investors alike.

Future Fundraising Prospects

Even if the additional 5% token tranche sells out, WLFI has another 10% of its supply—10 billion tokens—unallocated. Documentation suggests profits from these sales will flow directly to Trump, his family, and other stakeholders.

BitGalactic warns that while these developments highlight the intersection of politics and crypto, they also underscore significant risks. Concentrated ownership, lack of tradability, and regulatory uncertainties make WLFI a speculative venture at best. Investors should exercise caution and prioritize transparency and decentralization when evaluating projects in this rapidly evolving space.

Conclusion

World Liberty Financial’s ability to raise significant funds amid political connections and market speculation reflects the allure of high-profile endorsements in the crypto world. However, BitGalactic emphasizes the importance of critically assessing tokenomics, project fundamentals, and regulatory compliance before committing to such investments.