World Liberty Financial’s WLFI Token Plummets to Record Low Amidst Collateral Issues

TLDR

• WLFI has fallen 12% to hit its lowest price since its 2025 launch
• World Liberty Financial put up its own WLFI token as collateral to borrow stablecoins on Dolomite DeFi
• The borrowing activity drained Dolomite’s USD1 pool, leaving other depositors blocked from withdrawing their funds
• The value of Justin Sun’s frozen WLFI holdings dropped more than $11 million in a single day
• WLFI’s treasury buybacks are now roughly 48% underwater on average

(SeaPRwire) –   World Liberty Financial’s WLFI token dropped around 12% over 24 hours, reaching its lowest price point since launching in 2025. The token was trading at approximately $0.0818, extending its weekly losses to 15% and monthly losses to 17%.

The sharp sell-off followed a CoinDesk report that WLFI had deposited billions of its own governance tokens as collateral on the Dolomite lending protocol. Against this collateral, the project borrowed tens of millions of dollars in stablecoins, including USDC and its own USD1 token.

On-chain data from Arykham confirms that a project-associated wallet collateralized 5 billion WLFI tokens on Dolomite, securing roughly $75 million in borrowed stablecoins. Shortly after the transaction, more than $40 million of these borrowed funds were transferred to Coinbase Prime.

Day 44: We are once again seeing extreme levels of suspicious activity.

Yesterday, the Trump family’s crypto project deposited 5% of $WLFI’s total supply on Dolomite and borrowed $75 million in stablecoins against the collateral.

5% of WLFI’s token supply is worth roughly $500M.

Then, just a few hours… pic.twitter.com/ACqGXpvckg

— Ethan DeFi (@EthanDeFi_) April 8, 2026

This large borrowing pushed Dolomite’s lending pool to full capacity, leaving other depositors temporarily unable to withdraw their funds from the protocol.

World Liberty Responds to Criticism

World Liberty Financial posted a thread on X to defend its position. The team dismissed public concerns as “FUD” and stated the project was “nowhere near liquidation.”

“Even if markets moved dramatically against us, we would simply add more collateral,” the team shared. Critics point out that adding more WLFI to back a WLFI-collateralized position on a protocol advised by a WLFI advisor deepens circular risk instead of resolving it.

We are one of the largest suppliers and borrowers on WLFI Markets.
Yes, we supplied WLFI as collateral and borrowed stablecoins. No, we are nowhere near liquidation — and frankly, even if markets moved dramatically against us, we’d simply add more collateral. That’s not a…

— WLFI (@worldlibertyfi) April 9, 2026

Dolomite co-founder Corey Caplan also serves as an advisor to World Liberty Financial, which has amplified conflict-of-interest concerns raised by industry analysts.

WLFI disclosed it spent $65.58 million buying back 435.3 million WLFI tokens at an average price of $0.1507 over six months. With the token now trading near $0.078, those buybacks are roughly 48% underwater.

Justin Sun Takes a Hit

Tron founder Justin Sun saw the value of his frozen WLFI holdings drop by more than $11 million in a single day. Sun originally invested $30 million into World Liberty Financial in late 2024 and later grew his position to be worth around $75 million.

World Liberty blacklisted Sun’s wallet last year after he moved roughly $9 million worth of WLFI, freezing all of his tokens. Blockchain analytics firm Bubblemaps estimates Sun now holds around 545 million frozen WLFI tokens worth approximately $45 million — down more than $80 million from earlier valuations.

Three billion additional WLFI tokens remain held in an intermediary wallet after treasury transfers completed on April 2 and April 7, currently valued at around $234 million.

The token’s RSI sits near 30, bordering oversold territory, while MACD indicators show continued bearish momentum. The nearest support level is $0.079, with further downside targets at $0.075 and $0.070 if selling pressure continues.