Editor: Peter_Techub News
The decentralized finance (DeFi) project World Liberty Financial (hereinafter referred to as WLF), supported by the Trump family, recently announced plans to make its governance token WLFI transferable to meet investors' demands for higher liquidity and utility. This initiative marks a significant shift in the project's token functionality and market positioning, potentially paving the way for WLFI's public trading and broader market adoption. However, this change also comes with regulatory uncertainties and market controversies; below is a comprehensive analysis of the event.
Related News: WLFI: Token transfer function will soon be available, with updates to be announced
Current Status of WLFI Token: Governance Tool with Liquidity Restrictions
Since its official launch in September 2024, WLF has positioned itself as a decentralized finance platform aimed at enhancing the dominance of the US dollar in global finance through the widespread adoption of dollar-pegged stablecoins. WLFI, as the governance token of the platform, allows holders to participate in key platform decisions, such as proposal voting and protocol upgrades. However, the WLFI token currently has non-transferable characteristics, being locked in user wallets or smart contracts, and cannot be traded or sold on secondary markets. This design was intended to circumvent the regulatory scrutiny of the U.S. Securities and Exchange Commission (SEC), positioning the token as a non-security asset, but it has also limited its liquidity and market appeal.
According to public information, WLF has raised $550 million through two rounds of token sales, selling over 25 billion WLFI tokens and attracting participants including politicians and institutional investors. Nevertheless, due to the inability to trade the tokens, holders can only use them for governance functions, lacking secondary market liquidity, which has led to dissatisfaction among the community and investors. Some market observers have even attributed WLFI's poor sales performance to its non-transferability and insufficient disclosure of practical uses. For instance, data from October 2024 indicated that the first-day token sale only achieved 4.24% of its total target, far below expectations.
Transferability Plan: Potential Market Impact
WLF recently stated that it will gradually unlock the transferability of WLFI tokens through a governance process, allowing holders to conduct peer-to-peer transfers between wallets and potentially list on decentralized exchanges (DEX) or centralized exchanges (CEX) in the future. This change could have the following impacts:
Enhanced Price Discovery and Market Demand: The transferability of the token will introduce a market-driven price discovery mechanism for WLFI, increasing its transparency and appeal. If WLFI can be listed on exchanges, investors will be able to buy and sell tokens more freely, potentially driving demand growth. Some users on the social media platform X have expressed optimism about this, with predictions that WLFI's price could reach between $4.7 and $47 after trading opens, although these predictions may be overly optimistic and lack data support.
Attracting a Broader Investor Base: Currently, WLFI purchases are limited to accredited investors in the U.S. and qualified non-U.S. investors, with strict KYC (Know Your Customer) requirements limiting its market reach. Transferability and potential exchange listings could attract more retail investors, especially those drawn to the Trump brand, further promoting the adoption of DeFi.
Enhancing Ecosystem Functionality: WLF's vision is to bring traditional financial users into the Web3 world, achieving financial democratization through its USD1 stablecoin (launched in March 2025, with a circulation of $2.1 billion by April) and DeFi lending services. Transferable WLFI tokens could become a key component of the ecosystem, enhancing user engagement and platform activity.
Regulatory Challenges and Connection to the Trump Family
Despite the potential opportunities brought by the transferability plan, the associated regulatory risks cannot be overlooked. Due to WLF's close ties to the Trump family, the project has been under strict scrutiny since its launch. Trump himself serves as the "Chief Crypto Advocate," while his sons Donald Trump Jr. and Eric Trump are designated as "Web3 Ambassadors," and 18-year-old Barron Trump is listed as a "DeFi Visionary." Additionally, the Trump family holds approximately 40% of WLF through DT Marks DeFi LLC (down from 75% as of December 2024), and is entitled to 75% of the net proceeds from token sales, further intensifying market skepticism regarding its "politicized" motives.
The SEC's regulatory stance on cryptocurrencies is stringent, particularly concerning tokens that may be classified as securities. The non-transferability design of WLFI was initially seen as a way to evade securities laws, but once the tokens become tradable, their nature may be re-evaluated, increasing the risk of being classified as securities. Furthermore, the U.S. Congress is investigating Trump's connections to the crypto industry, especially in the context of the USD1 stablecoin issuance he supports and the advancement of the GENIUS Act (regulatory legislation for domestic payment stablecoins). These factors could present legal and compliance obstacles for WLFI's transferability plan.
Market Reaction and Community Sentiment
The transferability plan for WLFI has sparked heated discussions in the market, but community reactions are polarized. On one hand, some investors are excited about the prospect of open trading, believing it will bring higher market capitalization and liquidity to WLFI. For example, some users on platform X predict that WLFI could become a pillar of the U.S. financial system, especially with support from Trump’s policies. On the other hand, the community has expressed concerns about the project's transparency and credibility. In October 2024, reports indicated that WLFI's codebase was highly similar to that of Dough Finance, which suffered a flash loan attack, raising concerns about plagiarism and security. Additionally, the lackluster performance of the token sale (targeting 20 billion tokens, with only about 5 billion sold) and insufficient technical disclosures have led some users to question its true value.
Currently, WLF has not announced a specific implementation timeline or technical details. Until updates are implemented, WLFI will remain solely a governance token without public market trading functionality. Questions about whether WLFI will eventually be publicly issued remain to be further disclosed by the official team.
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