- World Liberty Financial’s symbolic sale has so far raised only $11 million.
- Donald Trump, and others who could benefit from the project, might not make any money.
The long-awaited token launch of World Liberty Financial’s Trump DeFi project was a disaster.
World Liberty’s website crashed several times after the sale started at 12.47pm UK time on Tuesday. So far, investors have purchased 766 million tokens – a lukewarm response after a project representative boasted of more than 100,000 registrations to buy the token.
So far, only $11 million has been raised from the sale, a fraction of the project’s ambitious $450 million goal.
If sales of the WLFI token do not resume, that means those who stand to benefit financially from the project – including several members of the Trump family – could be left empty-handed.
World Liberty Financial is a DeFi protocol built on top of the top smart contract network Ethereum. It will allow users to lend and borrow crypto assets like Ether, and is even considering issuing its own stablecoin.
In addition to launching the token sale, World Liberty has for the first time provided a full list of people who will benefit from the project in its “goldbook,” a Trumpian version of the popular crypto white paper.
Besides the Trump family and project founders Chase Herro and Zach Folkman, several other people could benefit, including longtime Trump ally and real estate developer Steve Witkoff and his children.
The document also details the complex structure of the company operating behind the project.
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The $450 million sale
Like many other DeFi projects, World Liberty launched a token to entrust certain aspects of its governance to its community.
Most DeFi projects choose to launch tokens via an airdrop in an attempt to stay on the right side of strict US securities laws.
World Liberty, meanwhile, is selling 35% of its 100 billion token supply to the public and accredited investors based in the United States.
Based on the amount of tokens sold and money raised, the sale will raise at least $450 million if sold.
Of that amount, plus any other money generated by the project, $30 million will be set aside to cover World Liberty’s operating expenses, the newspaper said.
While World Liberty has yet to raise $30 million through its token sale, it could run into problems before it even gets off the ground.
“First supporters”
The rest of the money raised by the protocol, potentially more than $420 million, will be distributed among a narrow 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; Rich Teo, co-founder of Paxos, as well as several others.
The group will also share a pool of 30 billion WLFI tokens, or 30% of the total supply.
This pales in comparison to the 2.5% – or 2.5 billion tokens – distributed among World Liberty’s eight expert advisors.
It is unclear whether WLFI will ever have a monetary value.
At launch, the token is not tradable and there is no guarantee that it ever will be. Gold paper state tokens will be “locked indefinitely” until, if at all, they are made tradable via a governance vote that does not violate U.S. law.
Complex structure
Then there’s World Liberty’s potential revenue. The protocol will charge a fee to those who use it, although the exact amount of this fee has not yet been revealed.
Even though World Liberty Financial is controlled by a Delaware-based holding company, its profits will be distributed elsewhere.
About 75% will go to a Trump-owned company called DT Marks DEFI LLC, while the remaining 25% will go to Axiom Management Group, LLC, a Puerto Rican company owned by Herro and Folkman, according to the newspaper.
Herro and Folkman agreed to send 50 percent of the fees paid to them to WC Digital Fi LLC, another company affiliated with Steve Witkoff.
The deal is likely a nod to Witkoff’s involvement in the conception of World Liberty Financial. It was Witkoff who initially introduced Herro and Folkman to Trump’s sons.
Regardless, these groups will not receive any protocol revenue until World Liberty Financial is operational. The project has not yet revealed a launch date.
Tim Craig is DL News’ DeFi correspondent based in Edinburgh. Contact us with advice at tim@dlnews.com.
