Source: Fortune
Summary
World Liberty Financial’s native token WLFI plummeted to an all-time low after reports surfaced that the company lent out tokens on a platform tied to one of its executives, Corey Caplan. The token’s price dropped 82% from its all-time high last September. Blockchain data shows that World Liberty Financial lent WLFI tokens worth hundreds of millions of dollars to a decentralized platform named Dolomite, borrowing stablecoins in return. The size of the loans poses a risk to the token’s price, and investor worries are growing.
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The strategy enters a familiar phase.
World Liberty Financial’s lending activities on Dolomite have raised concerns among investors, with roughly 5% of WLFI’s supply now collateral on the platform. The company has acknowledged its loan positions but claims they are “nowhere near liquidation.” WLFI’s price tumbled nearly 15% after the news broke. Hedge funds and foundations may be exposed to WLFI, including those that purchased tokens following token swap agreements.
The phrase “anchor borrower” takes on a new meaning.
Author: Evan Null
