- World Liberty Financial's token sale has only raised $11 million so far.
- Donald Trump, and others who stand to gain from the project, may not make any money.
Trump DeFi project World Liberty Financial’s long-awaited token launch has been a disaster.
The World Liberty website has crashed multiple times after the sale began at 12:47 pm UK time on Tuesday. So far, investors have bought 766 million tokens — a tepid response after a project representative boasted of over 100,000 sign ups to buy the token.
Just $11 million has been raised from the sale so far, a fraction of the project’s lofty $450 million target.
If sales of the WLFI token don’t pick up, it means those who stand to benefit financially from the project — including several members of the Trump family — could end up empty handed.
World Liberty Financial is a DeFi protocol built on top smart-contract network Ethereum. It will let users lend and borrow crypto assets like Ether, and even plans to issue its own stablecoin.
In addition to the token sale launch, World Liberty has for the first time provided a full list of who will benefit from the project in its “goldpaper,” a Trumpian take on the popular crypto whitepaper.
Along with the Trump family and project founders Chase Herro and Zach Folkman, several others stand to benefit, including longtime Trump ally and real-estate developer Steve Witkoff and his children.
The paper also details the complex company structure operating in the background of the project.
The $450 million sale
Like many other DeFi projects, World Liberty has launched a token to hand over some aspects of its governance to its community.
Most DeFi projects choose to launch tokens through an airdrop in an attempt to stay on the right side of strict US securities laws.
World Liberty, on the other hand, is selling 35% of its 100 billion token supply to the public and US-based accredited investors.
Based on the amount of tokens sold and money raised, the sale will net at least $450 million if it sells out.
Of this amount, plus any other money the project makes, $30 million will be set aside to cover World Liberty’s operating expenses, the paper says.
With World Liberty yet to raise $30 million from its token sale, it could encounter issues before it even gets off the ground.
‘Initial Supporters’
The rest of the money the protocol raises, potentially upwards of $420 million, will be split between an inner circle of so-called “Initial Supporters” via three limited liability companies.
These supporters include Donald Trump and his three sons Donald Jr, Eric, and Barron; project co-founders Folkman and Herro; Steve Witkoff and his sons Zach and Alex; Paxos co-founder Rich Teo, as well as several others.
The group will also split a pool of 30 billion WLFI tokens — 30% of the total supply.
That pales in comparison to the 2.5% — or 2.5 billion tokens — split between World Liberty’s eight expert advisors.
Whether WLFI will ever have a monetary value isn’t clear.
On launch the token isn’t tradable, and there’s no guarantee it ever will be. The goldpaper states tokens will be “locked indefinitely” until such time, if ever, they are made tradable via a governance vote that does not break US law.
Complex structure
Then there’s World Liberty’s potential revenue. The protocol will charge fees to those who use it, although exactly how much these fees will be hasn’t yet been revealed.
While World Liberty Financial is controlled by a Delaware-based holding company, its profits will be distributed elsewhere.
Some 75% will go to a Trump-owned company called DT Marks DEFI LLC, while the remaining 25% go to Axiom Management Group, LLC, a Puerto Rico company owned by Herro and Folkman, according to the paper.
Herro and Folkman have agreed to send 50% of fees paid to them to WC Digital Fi LLC, another company affiliated with Steve Witkoff.
The agreement is likely a nod to Witkoff’s involvement in World Liberty Financial’s conception. It was Witkoff who initially introduced Herro and Folkman to Trump’s sons.
In any event, these groups won’t receive any protocol revenue until World Liberty Financial is up and running. The project has yet to reveal a launch date.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
