World Liberty Financial, a new crypto lending platform endorsed by Donald Trump and his sons, is raising eyebrows with its tokenomics. The project’s white paper draft reveals that a staggering 70% of its WLFI tokens are allocated to insiders—founders, team members, and service providers. This is an unusually high percentage compared to other projects in the crypto space. For context, Ethereum allocated just 16.6% of its tokens to its founders, and Bitcoin’s creator, Satoshi Nakamoto, is believed to hold around 5% of Bitcoin’s total supply.
This hefty insider allocation is causing some skepticism. The project is touted as a revolutionary move to bring finance back to the people and challenge the “rigged” traditional financial system. However, with such a large chunk of tokens reserved for insiders, questions arise about whether World Liberty Financial is more about leveraging Trump’s fame than about delivering genuine DeFi innovations.
The WLFI token will be non-transferable, which is intended to prevent regulatory issues but also raises concerns about liquidity and investor freedom. Additionally, the project has faced scrutiny due to its association with a recently hacked crypto app and potential ties to fraudsters. Even within the Trump-supporting crypto community, there are fears that this venture could backfire, hurting Trump’s reputation and adding legal troubles.
In the grand scheme of things, the allocation strategy and the project’s overall approach could either be a groundbreaking success or a massive embarrassment. The high insider allocation coupled with a lack of clarity about how the project will use its funds creates a murky outlook. Traders and investors should watch closely as this project unfolds, given its high-profile endorsements and the controversial distribution of its tokens.
