World Liberty Financial’s governance token plunged to new lows on Friday after the crypto project backed by President Donald Trump and sons indicated that it’s crafting a proposal to unlock WLFI for early holders—while also defending $150 million in stablecoin loans.

The token, which debuted as a non-transferable digital asset last year, changed hands around $0.08, a 14% decrease over the past day, according to CoinGecko. Meanwhile, WLFI’s market cap tumbled $427 million to $2.58 billion from nearly $3 billion.

On Thursday, World Liberty responded to what it described as “FUD”—the industry's colloquial acronym for “fear, uncertainty, and doubt”—that circulated on X after the project tapped decentralized finance protocol Dolomite for loans denominated in USDC.

Onlookers expressed concern that the protocol’s users would face losses or struggle to withdraw funds if World Liberty’s loans were liquidated because of WLFI’s thin liquidity. Some pointed to Dolomite’s lending pool for USD1, suggesting that borrowing appeared constrained as its so-called utilization for World Liberty’s stablecoin became elevated. 

The fear is that Dolomite’s protocol would be stuck with bad debt if it were forced to unwind World Liberty’s loans, recouping far less than the value of stablecoins borrowed. However, the Trump-backed crypto project pushed back against the notion that that could happen.

“We are nowhere near liquidation,” World Liberty said. “Even if markets moved dramatically against us, we'd simply supply more collateral. That's not a risk.”

The project framed its behavior as beneficial for users supplying stablecoins on Dolomite, whose co-founder Corey Caplan serves as a World Liberty advisor. The Trump-backed project said that Dolomite’s users are intentionally “earning outsized stablecoin yields right now—at a time when traditional markets are offering very little.”



Still, some observers found WLFI’s defense lacking because the team didn’t explain how it planned to pay back the stablecoin debt. Another noted that a portion of the stablecoins World Liberty borrowed was transferred to Coinbase Prime, where trading could occur.

Decrypt reached out to World Liberty for comment but did not immediately receive a response.

Across two wallets, World Liberty has posted around $400 million worth of WLFI as collateral on Dolomite, according to blockchain analysis firm Arkham Intelligence. That represented roughly 98% of the token’s supply on the platform, potentially concentrating risk.

World Liberty said that it is also drafting a governance proposal that would allow WLFI holders to vote on unlocking tokens. Currently, around 75% of the token’s supply remains locked, preventing investors from trading the token, according to Token Unlocks.

Across two sets of WLFI sales, World Liberty said last March that it raised $550 million across 85,000 participants. Months later, the project acknowledged that there is “strong demand” from early adopters to make the token tradable. Some 20% of the token’s total supply has been allocated via public sales, worth $2 billion on paper, Token Unlocks data showed.

In a follow-up post to X, World Liberty clarified on Thursday that its governance proposal wouldn’t unlock all those tokens immediately. The project said its submission would feature a “long-term vesting and unlock schedule” that keeps its ecosystem’s health in mind.

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