The DeFi investment fund World Liberty Fi is continuing a major restructuring of its portfolio. Recent on-chain data show that the project is systematically reducing its exposure to Wrapped Bitcoin (WBTC) and reallocating capital into Ethereum, which it views as a more flexible and yield-efficient asset within decentralized finance.
This move reinforces a longer-term trend in which World Liberty Fi treats Ethereum as its primary DeFi collateral, while Bitcoin increasingly plays the role of a passive reserve rather than an actively deployed asset.
From WBTC to ETH: On-chain data reveals the details
According to blockchain data, the fund recently withdrew 162.69 WBTC worth approximately $15 million from the Aave lending protocol. Part of this position—27.12 WBTC (around $2.5 million)—was subsequently swapped for 770.6 ETH.
The transaction was executed via Cow Protocol, a decentralized trade aggregation route integrated with Aave. World Liberty Fi uses a dedicated wallet specifically for its DeFi operations, indicating that this liquidity shift was deliberate and strategically planned rather than reactive.
Why WBTC is losing relevance in DeFi
The primary driver behind the exit from WBTC is capital inefficiency. Yields on WBTC deposits on Aave currently sit at around 0.1% annually, which is negligible in the DeFi landscape. Ethereum, by contrast, offers far broader utility—ranging from staking and liquid staking derivatives to higher-yield lending and collateral strategies.
Following a recent governance vote, WETH on Aave can now earn up to 3.81%, dramatically improving the risk-to-return profile. Ethereum is also considerably more agile than WBTC, which has gradually been restricted or removed from several DeFi protocols.
Meanwhile, the total supply of WBTC has fallen to a historical low of 124,963 tokens, partly due to declining support from major holders, including entities linked to the collapse of FTX.
Ethereum becomes the core DeFi collateral
World Liberty Fi now holds more than 770 WETH, with a portion of these tokens currently unallocated to any DeFi protocol. This gives the fund significant flexibility—ETH can be rapidly deployed into staking, liquidity pools, or used as collateral for new strategies.
The shift occurred while Ethereum was trading around $3,255, with Bitcoin valued at roughly 0.035 BTC per ETH. The timing suggests the fund anticipates Ethereum continuing to strengthen its role as the backbone of DeFi infrastructure.
USD1: Stablecoin expansion as a second strategic pillar
Alongside its ETH-focused strategy, World Liberty Fi is also accelerating the expansion of its stablecoin, USD1. While the WLFI governance token remains largely inactive—trading near $0.17—the supply of USD1 has surged.
At the start of the year, USD1 surpassed 3.38 billion tokens in circulation, marking a new all-time high. The stablecoin is rapidly spreading across multiple ecosystems and now serves as a source of both centralized and decentralized liquidity.
USD1 has gained significant traction within the Binance ecosystem, where new trading pairs were recently launched. It is also increasingly used on BNB Chain, within meme token ecosystems, and on decentralized exchanges, including Raydium on the Solana network.
Multichain growth reshapes USD1’s distribution
The geographic and technical distribution of USD1 is also evolving. While more than 94% of the supply was initially concentrated on BNB Chain, that figure has now declined to roughly 61%. The fastest growth is occurring on Ethereum, with strong capital inflows also heading toward Solana.
USD1 is therefore emerging as a true multichain stablecoin, providing liquidity across multiple networks. It is also being used to support selected meme tokens—highly volatile assets that nonetheless attract active trading capital the fund appears willing to engage with.
Bottom line: A clear shift toward efficiency
World Liberty Fi’s recent actions highlight a decisive move away from passive Bitcoin exposure toward active Ethereum-based DeFi strategies, supported by the growing role of USD1 as a liquidity backbone. The fund is clearly focused on maximizing capital efficiency while maintaining flexibility across multiple blockchains.
This strategic shift may offer a glimpse into the broader direction of the DeFi sector in 2026—less idle capital, more productive deployment, and a growing emphasis on Ethereum-centered infrastructure.
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