WLFI lent approximately $75 million in stablecoins from Dolomite, a DeFi lending protocol co-founded by its advisors.

CoinFeed reported on April 9th ​​that, according to CoinDesk, World Liberty Financial (WLFI), a crypto project with ties to the Trump family, pledged approximately 5 billion of its own token, WLFI, as collateral on the DeFi lending protocol Dolomite, borrowing about $75 million worth of stablecoins from the protocol. Of this, over $40 million was transferred to Coinbase Prime. This action pushed the utilization rate of the USD1 pool on Dolomite to approximately 93%, making it difficult for ordinary depositors to withdraw their funds in a timely manner. Due to WLFI's limited liquidity, if a price drop triggers liquidation, a forced sell-off could cause a rapid decline in the value of the collateral, potentially leading to bad debts for the protocol. Ultimately, the risk would be borne by depositors who are currently unable to withdraw their funds.