World Liberty, $7.5 million loan from Aave..."Likely USD1 withdrawal procedure"

World Liberty Financial (WLFI) has reportedly borrowed $7.5 million worth of the stablecoin Tether (USDT) from the decentralized lending protocol Aave.

On the 10th (local time), Onchain Lens, citing data from Nansen, reported that "to do so, WLFI deposited about $52 million worth of virtual assets (cryptocurrencies) — including Ethereum (ETH), Wrapped Bitcoin (WBTC), and Lido Staked Ether (STETH) — as collateral in Aave."

The use of the loaned funds has not been disclosed yet. However, as the funds have been transferred to a wallet managed by the custody firm Bitgo, some interpret this as a deposit procedure for USD1 withdrawals. USD1 is a U.S. dollar-pegged stablecoin issued by WLFI, and Bitgo is the custodian for this asset.

Meanwhile, WLFI is taking aggressive steps to expand the circulation of USD1. According to DeFiLlama data, the current circulating market capitalization of USD1 is about $2.18 billion, showing rapid growth. However, $2 billion of this amount comes from the sovereign wealth fund MGX's investment on Binance, and the net increase over the past 30 days was less than $60 million.