World Liberty Financial (WLF), a decentralized finance (DeFi) project associated with former U.S. President Donald Trump and his family, is gearing up for its first token sale next week.
The project aims to raise $300 million by selling 20% of its WLFI tokens, giving it a fully diluted valuation of $1.5 billion. This marks a significant milestone for the Trump-backed initiative in the DeFi space.
Token sale details and governance features
The upcoming token sale will only be the initial phase of the WLFI token’s public offering, with 63% of the total token supply slated for public sale. According to Zak Folkman, a co-founder of WLF, the project team will retain 20% of the tokens, while 17% will be allocated for user rewards. One key feature of the sale is the 12-month lockup period for the tokens, during which they will not be transferable. This strategy aims to prevent speculative trading and avoid short-term price manipulation.
Although the tokens will be locked, WLFI will serve as a governance token for the platform. While governance features will be active immediately, any vote to unlock tokens for trading cannot be implemented until the lockup period ends. This is intended to ensure long-term stability for the project in its early stages.
Limited access for investors and expansion plans
Due to regulatory restrictions, only accredited investors in the U.S. and qualified investors in the UK will be eligible to participate in the sale. WLF attributed these limitations to outdated regulations, emphasizing that investors from other regions can purchase the token.
In addition to its DeFi plans, the WLF team has ambitious goals for the project, including creating an on-chain financial platform with various use cases. The project’s roadmap highlights a plan to deploy a version of Aave’s v3 protocol on the Ethereum Layer-2 network Scroll.
This move aims to provide stablecoin liquidity and attract new users to decentralized finance. In return, WLF is offering Aave DAO 7% of its tokens, valued at $105 million, to participate in governance and liquidity activities. Furthermore, WLF has committed to sharing 20% of fees generated on its Aave v3 implementation with Aave.
Mixed reactions from the Crypto community
The proposal has sparked mixed reactions within the Aave community. Supporters, such as Aavechan Initiative founder Marc Zeller, view it as an opportunity to increase adoption and create value for Aave. However, some critics argue that the project’s association with Trump and his family poses a reputational risk to Aave. They suggest that WLF develop its independent protocol to build trust within the crypto community.
Despite the divided opinions, the proposal remains under consideration, with the Aave DAO yet to make a final decision. Meanwhile, WLF’s future roadmap includes plans to integrate its token with exchanges, develop a stablecoin-based credit card, and tokenize real-world assets in compliance with regulations.
Its success could depend heavily on the broader political landscape as the project progresses, especially with Trump’s involvement. Some analysts believe a favorable outcome in the upcoming U.S. election could positively impact the project’s growth and token value.