Author: Nancy, PANews
Another king-level project is about to be unveiled, with the crypto project World Liberty Financial (WLFI) supported by the Trump family set to launch on the Ethereum mainnet. Its extremely high market valuation and astonishing early returns have quickly made it a hot topic in the crypto circle. However, WLFI has also fallen into a public opinion whirlpool due to the controversial profit-sharing proposal with Aave, and this on-chain governance drama has sparked market discussions and reflections.
WLFI is about to go live on Ethereum, with early investors potentially earning up to 14 times their investment.
On August 23, WLFI announced that it would launch on the Ethereum mainnet on September 1, at which point users could claim and trade tokens. Among them, early supporters (at $0.015 and $0.05 rounds) will unlock 20%, while the remaining 80% will be determined by community vote. Tokens held by the founding team, advisors, and partners will not be unlocked at launch.
After the launch news was released, exchanges such as Binance, OKX, and Hyperliquid announced the launch of WLFI/USDT perpetual contract pre-market trading. On that day, the contract price once surged to $0.55, corresponding to a total circulating valuation of about $55 billion. However, the price quickly retreated, with the pre-market trading price dropping more than 60%, falling to about $0.2.
WLFI was announced to be launched by the Trump family in September 2024, and has publicly conducted two rounds of fundraising so far. The first round of presale started on October 15, 2024, when WLFI announced a release of 20 billion tokens at a price of $0.015 per token to whitelist investors. However, the market response was lukewarm, with approximately 610 million WLFI sold on the first day (194 billion remaining to be sold), generating only $9.15 million in sales. Due to the weak market response, WLFI also submitted an application the following month to drastically reduce its fundraising target by 90%, now planning to raise only $30 million.
However, since Trump won the US election, WLFI token sales began to accelerate, eventually selling out 20 billion tokens by January 20, 2025, raising approximately $300 million. During this period, TRON founder Justin Sun made two rounds of investments of $30 million and $45 million, becoming the largest individual investor in this round of fundraising, while also serving as an advisor to WLFI.
On January 20, 2025, coinciding with Trump's inauguration, WLFI launched its second round of presale, announcing an additional 5% of the token supply, with the price raised to $0.05. Compared to the first round, this round of presale saw a strong response, selling out in just two months by March 14, successfully reaching the $250 million fundraising target.
According to WLFI's tokenomics, the total supply is 100 billion tokens, of which 35% is allocated for token sales, 32.5% for community growth and incentives, 30% for initial supporters, and the remaining 2.5% for the team and advisors. Based on the current public offering progress, WLFI has completed 25% of the total supply, with 10% remaining for sale.
Based on the current pre-market trading price of $0.21, investors who bought at $0.015 have an approximate unrealized gain of 14 times, while participants who invested at $0.05 have an unrealized gain of about 4.2 times. Additionally, on-chain analyst Ai Yi revealed that the cumulative investment from the public round participants in WLFI's top 10 addresses was $73.08 million, holding a total of 4.63% of the tokens, or 4.64 billion tokens. At the current price, this portion of investors' TGE will unlock tokens worth over $190 million.
In addition, information about WLFI's market makers has also been disclosed. According to analysis from Ai Yi, DWF Labs is undoubtedly a WLFI market maker, and there will likely be other market makers as well. Data shows that Web3Port acquired 200 million WLFI tokens (cost $0.05) in the strategic round, DWF Labs obtained 250 million tokens (cost $0.1) in the strategic round, and ALT5 Sigma Corporation acquired 7.5 billion tokens through equity acquisition (cost $0.2).
It is worth noting that DT Marks DEFI LLC, affiliated with the Trump family, can receive 75% of the net income distribution rights of the protocol, while not bearing any responsibilities. Meanwhile, during the public fundraising process, DT Marks DEFI LLC has reduced its shares from the original 75% to about 40%.
The proposal for the 7% token distribution has raised doubts, with WLFI and Aave each holding their ground.
While the high returns for early WLFI investors have sparked heated discussions, rumors about Aave possibly acquiring 7% of the total WLFI tokens have also led to ongoing community disputes. The WLFI team denied this, but Aave insisted that the protocol is still valid, with both sides holding their positions.
The incident can be traced back to before WLFI's official launch. At that time, WLFI revealed plans to provide crypto lending services on the Ethereum blockchain and stated in their official Telegram channel that they were collaborating with Aave, emphasizing that this was not a malicious fork, but rather a desire to create an innovative platform to promote the development of the DeFi industry.
In early December 2024, WLFI proposed its first community proposal, planning to deploy a lending instance of the WLFI protocol on the Ethereum mainnet using Aave v3, initially supporting USDC, USDT, ETH, and WBTC, managed by the Aave risk management team. The main goal of the proposal is to attract users entering DeFi for the first time and enhance the recognition of WLFI and the Aave brand. In return, the proposal states that AaveDAO will receive 20% of the protocol fees generated by the WLFI Aave v3 instance, and will receive approximately 7% of the total WLFI token supply (7 billion tokens) for participation in WLFI's future governance, liquidity mining, and to promote platform decentralization. The revenue distribution plan will be executed through a trustless smart contract, proportionally distributing to the AaveDAO and WLFI treasury addresses. The proposal was voted on and passed on December 13, 2024, with a support rate as high as 100%.
With WLFI about to go live, this proposal has recently been reintroduced by the community, directly driving up the price of AAVE. Based on the current market valuation, the Aave treasury may receive WLFI tokens worth billions of dollars, making it one of the potential biggest beneficiaries in this cycle.
However, this favorable news was reportedly denied by suspected members of the WLFI Wallet team, and the WLFI team also responded to Wu Shuo Blockchain, stating that the claims were inaccurate and were 'fake news'. In response, Aave founder Stani.eth insisted that the protocol is still valid, emphasizing that this proposal was created by the WLFI team and formally approved.
As the news fermented, the crypto community has been in constant debate over this incident, with opinions varying widely. Crypto KOL @0x_Todd pointed out that this is WLFI's genesis proposal (the first proposal), with the number of voters exceeding the legal voting number by 7 times, and the support rate exceeding 99%. If even the genesis proposal does not materialize, it is very un-DeFi. Centralized governance is no longer DeFi, and governance breaches should be excluded from DeFi.
KOL @Luyaoyuan1 reminded that WLFI may have default risk, pointing out that there are historical precedents where similar SPK projects promised returns were significantly reduced, and Aave has been deceived multiple times. If a default occurs, Aave should sue WLFI.
According to dForce founder Mindao, the initial '20% revenue sharing + 7% token distribution' clause is unreasonable and does not match WLFI's actual brand and market value. He analyzed that the later scenario is likely WLFI completely abandoning Aave, thus nullifying the previous contracts. At the same time, WLFI will massively reduce the token distribution share and use it to incentivize the borrowing of USD1 stablecoins, effectively balancing the books.
‘Previously, WLFI's public sale was not smooth, and there were external doubts about its potential for exploitation, putting Aave in a strong position in the cooperation. However, with rising market enthusiasm, the stablecoin genius bill passing, and Trump personally disclosing holdings of 15.7 billion WLFI, its value status has improved, making WLFI unwilling to give Aave as large a share of the pie as before.’ @wenser2010 analyzed that Aave may need to make concessions, reducing its original share, or WLFI may push for a new proposal to redistribute profit ratios. As for the duration, it depends on the negotiations behind the scenes.
However, Alex Xu, a research partner at Mint Ventures, pointed out that WLFI initially intended to create a lending market based on Aave, but later WLFI may have found lending too unappealing (even though a proposal had been made with token and profit distribution plans), and shifted towards creating a stablecoin. If that's the case, the cooperative relationship between the two parties no longer exists, and the WLFI's official white paper has never included Aave.
Despite the ongoing controversy surrounding WLFI's cooperation with Aave, this incident once again exposes the limitations of on-chain governance. Although on-chain governance has advantages such as transparency and decentralization, the actual implementation still depends on the willingness and negotiation results of all parties, even if a proposal is approved by community vote.
