World Liberty Financial: A deep dive into Trump’s DeFi protocol

Over the past few months in decentralized finance, only a few projects have made waves like World Liberty Financial (WLF) has — a name gaining traction as much for its high-profile backers as for its aggressive moves in the crypto space. 

Backed by US President Donald Trump, WLF has been rapidly accumulating digital assets, cutting deals with Chainlink and Ethena Labs, and making headlines, including a recent purchase of $470,000 worth of ONDO tokens.

But while the WLF wave is moving fast, it’s also raising just as many questions as it answers. Its structure leans suspiciously centralized for a project that claims to be decentralized, and it has a governance token that holders can’t trade and a revenue model that funnels 75% of net profits to a Trump-affiliated entity.

To many people, this sounds less like a DeFi revolution and more like a politically branded investment vehicle.

Add in the fact that WLF’s co-founders, Chase Herro and Zachary Folkman, previously ran a struggling DeFi lending platform called Dough Finance, and the picture gets even murkier. Herro isn’t just another crypto entrepreneur — he was able to get the ear of the presidential family because his father is a close Trump ally, adding another layer to WLF’s web of personal connections and political ties.

So, what exactly is WLF building? Where is all the money going? And, perhaps most importantly, is this a project to watch or just another wave crashing against the rocks of established DeFi and legacy finance? Let’s dive in.

What is WLF?

World Liberty Financial is structured as a DeFi platform that enables users to borrow, lend and invest in digital assets without depending on traditional banking systems. The project’s mission is to “make crypto and America great” by promoting the widespread adoption of stablecoins and DeFi, strongly focusing on positioning US-pegged assets as the foundation for global financial settlements.

At its core, WLF seeks to provide an alternative to traditional financial institutions by eliminating intermediaries, lowering transaction costs, and enhancing financial accessibility for its users.

World Liberty Financial was launched in September 2024 by DT Marks DEFI and WLF Holdco. The Delaware-based WLF Holdco corporation holds 100% interest in World Liberty Financial, operating and controlling the protocol. The stated mission of the protocol is to “bring in a new era of decentralized finance,” according to the project’s “gold paper.”

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At the heart of the platform is its governance token, WLFI. Unlike typical cryptocurrencies, WLFI tokens are solely for governance (voting on platform decisions). These tokens are deliberately nontransferable after purchase, meaning holders cannot trade them for profit in the traditional sense. This model is intended to align users with the platform’s long-term vision rather than incentivize speculative trading.

What are the current holdings of WLF?

World Liberty Financial has built a diverse portfolio primarily focused on major cryptocurrencies and stablecoins, with significant investments in Ether (ETH) and wrapped Bitcoin (WBTC).

At the start of February, the company had allocated $266.72 million to Ether at an average price of $3,396.03. Still, due to recent market fluctuations, this investment has seen a 21.79% decline, translating to a current valuation of $208.61 million with 78,538.77 ETH held.

Similarly, its $67.42 million investment in WBTC at an average price of $104,243.93 has dropped by 7.59% percent, leaving it with a current valuation of $62.3 million and 646.72 WBTC in reserves.

Beyond volatile assets, WLF has also positioned itself in stablecoins to maintain liquidity. It held $37.26 million in USD Coin (USDC) in early February and $10.84 million in USDt (USDT). This blend of investments reflects WLF’s strategy of balancing long-term exposure to high-value crypto assets while maintaining a liquidity buffer through stablecoins, ensuring flexibility for future financial moves.

On Feb. 3, the official WLF X account responded to rumors it was selling tokens with an X post saying it was simply moving assets around and that no sales of any tokens were taking place. Around $345 million in digital assets were transferred, as shown above, mostly to CoW Protocol and Coinbase Prime, the centralized exchange’s institutional side.

Having assets broken up among centralized exchanges and various wallets makes tracking harder, especially when most cannot be monitored publicly. 

How does WLF stack up to legacy DeFi?

World Liberty Financial may have the backing of a high-profile brand, but at its core, it relies on Aave v3 for its lending and borrowing functions, meaning it doesn’t introduce much innovation beyond what already exists in DeFi.

That said, its governance structure and overall design set it apart from platforms like Aave, Sky Protocol (formerly MakerDAO) and Curve Finance. One of the most notable differences is its approach to governance, particularly its use of the nontransferable WLFI token.

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As mentioned earlier, the idea behind this is to discourage speculation and encourage long-term decision-making. In contrast, the AAVE (AAVE), SKY and MKR (MKR), and CRV (CRV) governance tokens are fully transferable and play a role in staking, governance and liquidity incentives, making them far more flexible and valuable within their respective ecosystems.

Perhaps the most controversial aspect of WLF is its centralized revenue-sharing model, which directs 75% of the protocol’s net revenue to a Trump-affiliated entity. This is a sharp departure from the models used by its competitors.

Aave distributes revenue among liquidity providers and stakers, Sky Protocol collects fees to maintain the Dai and USDS stablecoin system, and Curve Finance rewards long-term participants through veCRV staking. WLF, on the other hand, is structured in a way that financially benefits a specific entity rather than redistributing earnings to the broader community.

Beyond governance and revenue structure, WLF is positioning itself as a user-friendly, America-first DeFi platform, focusing on stablecoins and an interface designed to appeal to users who may not be familiar with crypto, relying more on political appeal than technical advancements to gain traction.

This branding could help onboard new participants into DeFi, yet it’s unclear whether it will translate into actual adoption. Aave, Sky Protocol and Curve have already cemented their positions in the DeFi ecosystem and are trusted by institutions and liquidity providers.

Decentralized in name, centralized in benefit? 

World Liberty Financial is making waves in DeFi, but whether it’s a true financial revolution or just another passing trend remains uncertain. With its political branding and centralized revenue structure, it relies on existing DeFi infrastructure rather than introducing groundbreaking innovation.

Like waves crashing against the rocks of legacy DeFi and traditional finance, WLF’s ambitions may either carve out a lasting impact or break apart under the weight of complexity, scrutiny and competition. The question is whether this force will reshape the landscape or simply fade into the sea.

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