WLFI token, launched by World Liberty Financial, has lost approximately 12 percent in value in the last 24 hours. After the decline, the statement made by the team behind the cryptocurrency on the X platform upon the reactions received attention. In the statement, the debates were responded to, especially regarding the borrowing transactions carried out in the decentralized finance protocol called Dolomite.
Collateral cycle discussions in the protocol
In the Dolomite protocol, it was revealed that the World Liberty Financial team used its own governance token as collateral, borrowed a stablecoin in return, and then most of the assets in the relevant pool were withdrawn. As a result of these transactions, other users in the pool began to have difficulty withdrawing their assets.
The management of the crypto company did not deny the transactions made, arguing that this was a deliberate and constructive strategy. While it is known that one of the names advising on the Dolomite protocol is also advising on the WLFI project, it was noted that the administration’s addition of additional WLFI tokens as collateral strengthened existing doubts rather than solving the problems.
The fact that the collateral flow on the protocol has a cyclical structure within WLFI’s own domain has caused warnings that it poses a risk for investors. Company officials presented this borrowing as an activity that generates income for other users.
Price and supply developments
The World Liberty Financial team announced that they bought back 435.3 million WLFI tokens at an average price of $ 0.1507 in the last six months, making a total purchase of $ 65.58 million. It was also stated that a governance proposal for unlocking early participants’ tokens will be available soon.
In comparison, the WLFI token price is currently trading approximately 48 percent below the buyback average. This situation shows that the company’s purchases from its own treasury are at a significant loss. The sharp depreciation in the WLFI token was reinforced as the token fell to its lowest level since its launch in 2025.
On the other hand, there are three billion WLFI tokens transferred from the treasury wallet to the wallet sometime between April 2 and 7. While the current value of these assets decreased to approximately 234 million dollars, this figure was at 266 million dollars a week ago.
If the three billion tokens in question are used as collateral in the Dolomite protocol in the future, the borrowing opportunity per token will decrease at current prices. The fact that the pool is almost empty will make it more difficult for other users to start borrowing transactions by adding new collateral and for other users to withdraw assets from the fund.
World Liberty Financial team said in a statement: “Despite the fluctuations in the market, we believe that our strategic borrowing decisions are sound; returns are also provided to other users in the system.” he stated.
