World Liberty Financial Borrows ₱4.5 billion ($75 million) Against WLFI Tokens

World Liberty Financial's team deposited 3 billion WLFI tokens as collateral on Dolomite to borrow ₱4.5 billion ($75 million) in stablecoins, creating what analyst Ethan DeFi called a setup comparable to Curve Finance and FTX collapses.

The collateral represents roughly ₱17.98 billion ($300 million) in nominal value and more than 50% of Dolomite's total value locked. Sixteen billion WLFI tokens are unlocking after nearly two years of holding restrictions, carrying a nominal valuation of $1.28 billion into a market with incredibly thin depth.

Dolomite's USD1 stablecoin pool hit 93% utilization as the WLFI team consumed liquidity, pushing lending rates to 35% APR. The protocol had $180 million supplied to the pool with $167.5 million borrowed. One unnamed analyst said the high rates weren't organic demand but rather one insider treasury consuming the entire pool, warning depositors they were earning yield on principal they couldn't access.

World Liberty Financial dismissed liquidation concerns in an April 9 post on X, stating they were nowhere near liquidation and would supply more collateral if markets moved against them.

Dolomite co-founder Corey Caplan also serves as technical advisor to World Liberty Financial, a dual role that puts him at the center of the crisis. Ethan DeFi called the team's response pathetic. Early investors filed lawsuits against the protocol days before the April 9 post.

The setup mirrors Michael Egorov borrowing nearly $100 million in stablecoins against CRV tokens and Sam Bankman-Fried's massive borrowing against FTT tokens. World Liberty Financial has claimed a $159.5 million annual revenue run rate for its USD1 stablecoin and executed $65.58 million in open-market buybacks over the last six months.