Donald Trump has made waves yet again, this time by stepping into the world of cryptocurrency with the launch of World Liberty Financial. The project, long speculated about, was officially introduced just a day after Trump survived a second assassination attempt. Despite the dramatic timing, Trump’s latest venture isn’t political; instead, it’s rooted in the evolving realm of decentralised finance (DeFi). But what exactly is World Liberty Financial, and what sets it apart in a crowded crypto market?
The project, which was unveiled in a live interview with Rug Radio, promises to provide borrowing and lending services for cryptocurrencies on the Ethereum blockchain network. While this may seem familiar to those already acquainted with DeFi, Trump’s team is emphasising that World Liberty Financial will be more user-friendly and accessible than many existing options. The project aims to open the door for people who may find current DeFi products too technical or difficult to navigate.
At the heart of the initiative is the World Liberty Financial governance token, known as WLFI. Unlike many other tokens circulating in the crypto space, WLFI will be non-transferable, meaning it can’t be traded or exchanged like a typical cryptocurrency. This marks a key distinction for World Liberty Financial, setting it apart from projects that rely on volatile token markets. The WLFI token will play a central role in the governance of the platform, allowing users to have a say in decisions and future developments.
The team behind the project is led by operations head Zak Folkman and strategy lead Chase Herro. During Monday’s interview, they shared some new details about WLFI’s distribution plan. Folkman was keen to highlight that there have been no pre-sales or early buy-ins from venture capitalists, a move designed to ensure that the token distribution is seen as fair by potential investors. This emphasis on fairness is a direct response to concerns that many DeFi projects are dominated by large, early investors, leaving regular users at a disadvantage.
According to the project’s white paper, a large portion of the token’s supply, 62.66%, will be made available in a token sale. A portion of the proceeds from this sale will go to the project’s multi-signature wallet treasury reserve, while the rest will be directed to the project’s founders, team, and service providers. This transparent allocation of funds is another sign that World Liberty Financial is attempting to position itself as a trustworthy player in the crypto world, which is often criticised for its lack of transparency.
A further 17.33% of WLFI’s supply will be reserved for initiatives aimed at increasing community participation in governance. This means that users who contribute to the growth of the World Liberty ecosystem, or who actively participate in its governance processes, will be rewarded with tokens. This approach is designed to incentivise engagement and build a loyal community around the platform. The remaining 20% of the token supply will be allocated to the project’s team, advisors, and future hires, with some of these tokens also earmarked for the WLF Foundation, as well as affiliates of the Trump Organization and the Witkoff Group. Steve Witkoff, a longtime ally of Trump, is also involved in the project, lending further weight to its connections with the former president.
Interestingly, early reports had suggested that World Liberty insiders would receive up to 70% of the token supply, a figure that sparked controversy and ran counter to industry norms. However, a source close to the project has since dismissed those reports as inaccurate, and the updated white paper reviewed by Decrypt shows significantly different token allocations. Whether this change is a direct response to the backlash or a natural part of the project’s development remains unclear, but it’s certainly a significant shift.
One of the major challenges facing World Liberty Financial is the current regulatory environment for DeFi projects. In recent months, U.S. regulators have been scrutinising the cryptocurrency sector more closely, and many projects have found themselves in legal grey areas. World Liberty Financial is attempting to navigate this uncertainty by ensuring that its token sale will be regulated by the U.S. Securities and Exchange Commission (SEC). The project will rely on Rule 506(c) of the SEC’s Regulation D, which allows certain unregistered securities to be offered to accredited investors under specific conditions.
This means that only accredited investors – individuals or entities that meet certain financial criteria set by the SEC – will be able to participate in the WLFI token sale. To qualify as an accredited investor, individuals must either earn at least $200,000 annually (or $300,000 with a spouse), have a net worth of $1 million or more, or hold certain professional qualifications such as being a licensed financial professional. While this requirement may limit the pool of potential investors, it also provides a degree of regulatory protection that many DeFi projects lack.
Additionally, all purchasers of WLFI will need to pass “know your customer” (KYC) checks, similar to those used by major American crypto exchanges like Coinbase and Kraken. This ensures that the project complies with anti-money laundering regulations and further strengthens its position as a legitimate and compliant DeFi platform.
Although the sale of WLFI tokens will be subject to SEC oversight, the project’s white paper states that the tokens are not intended to be classified as securities. This distinction is crucial, as the classification of crypto tokens as securities can have significant legal implications. By structuring the sale in this way, World Liberty Financial is attempting to stay on the right side of the law while still pushing forward with its DeFi ambitions.
Despite all the regulatory clarity offered so far, there are still many unknowns surrounding the project. A source familiar with the matter hinted that some finer details are still being finalised and could be subject to change. This leaves potential investors in a position of uncertainty, waiting for more concrete information before deciding whether to participate in the project.
World Liberty Financial has certainly generated a lot of attention, both because of Trump’s involvement and the unique approach the project is taking. By focusing on accessibility, transparency, and regulatory compliance, the team behind World Liberty is hoping to carve out a niche in the competitive DeFi space. Whether they succeed in doing so remains to be seen, but it’s clear that they are making efforts to address some of the biggest challenges facing the cryptocurrency industry today.