Summary
- World Liberty said it borrowed stablecoins on Dolomite using WLFI tokens as collateral, but rejected liquidation concerns as baseless.
- World Liberty said it deposited about 5 billion WLFI and borrowed about $75 million in USD1 and USDC against the tokens, moving $40 million of that amount to Coinbase Prime.
- A DeFi analyst said that if about 5%% of total supply hits the market while WLFI liquidity remains thin, it could lead to a sharp price drop.
Forecast Trend Report by Period
World Liberty Financial, the Trump family’s cryptocurrency project, dismissed concerns that its large borrowing position on decentralized-finance protocol Dolomite could trigger a liquidation.
Crypto outlet The Block reported on April 10 that World Liberty said in a post on X that it had recently borrowed stablecoins on Dolomite using WLFI tokens as collateral. The firm called fears of liquidation “baseless.”
World Liberty previously deposited about 5 billion WLFI tokens on Dolomite and borrowed roughly $75 million of USD1 and USDC against the holdings. Of that total, $40 million was moved to Coinbase Prime.
The large WLFI-backed borrowing position has drawn concern from the community. If the collateral lacks sufficient liquidity, losses during a liquidation could spill over to other depositors.
One DeFi analyst said the position would be difficult to unwind without major losses if it approached liquidation. If tokens equal to about 5% of total supply were dumped onto the market while WLFI liquidity remains thin, that could trigger a sharp price drop.
Uk Jin
wook9629@bloomingbit.ioH3LLO, World! I am Uk Jin.
