WLFI, the native token of the Donald Trump-backed World Liberty Financial platform, suffered a sharp depreciation over the weekend, falling to an all-time low.
Collateralized loan transaction increased sales pressure
The token price dropped to approximately $0.077, an 83 percent decline from the peak of $0.46 seen last September. While the current price is around $0.078, a decrease of 4.66 percent was recorded in the last 24 hours.
The decline in prices appears to have accelerated after wallets affiliated with World Liberty Financial took out loans using large amounts of WLFI tokens as collateral.
According to on-chain data, a wallet associated with the platform deposited approximately 5 billion WLFI tokens into the decentralized credit protocol called Dolomite. USD1 and USDC stablecoins worth $75 million were borrowed by using these assets as collateral.
It was determined that more than $40 million of the loan received was later transferred to Coinbase Prime. These movements attracted attention among market participants.
The transaction in question is considered risky, especially due to WLFI’s liquidity structure. Analysts evaluate that if the price continues to fall, the possibility of collateral liquidation may cause problems for lenders.
Liquidity and valuation discussions came to the fore
Some market participants emphasize that WLFI is not a sufficiently liquid asset despite having a fully diluted valuation of approximately $10 billion. For this reason, it is stated that sales pressure may increase rapidly in case of a possible liquidation.
The Dolomite platform, on the other hand, has limited size in the decentralized finance ecosystem. The fact that it ranks lower among credit protocols in terms of total locked value is among the factors that increase risk perception.
World Liberty Financial confirmed the loan transactions in a statement on social media and stated that the positions were well above liquidation levels.
The platform argued that the current strategy provides high returns and users earn higher profits through stablecoins compared to traditional markets.
Additionally, the project announced that it is preparing a new governance proposal for WLFI tokens. Accordingly, early investors’ token access will be tied to a long-term vesting schedule instead of being opened instantly.
World Liberty Financial stated that this change will be submitted to a community vote and that it aims to make the token economy more sustainable.
