Former President Donald Trump has officially entered the crypto space with the launch of World Liberty Financial (WLFI), a new decentralized finance (DeFi) platform centered around a crypto token.
The announcement was made during a live event on Twitter Spaces, marking Trump’s official embrace of blockchain technology after months of hints on social media.
Here’s what you need to know about this latest adventure:
What is World Liberty Financial?
World Liberty Financial is described as a DeFi money market that will allow users to borrow, lend, and earn interest on cryptocurrencies, with a focus on serving unbanked and underserved communities.
DeFi platforms differ from traditional financial institutions in that they remove middlemen, allowing transactions to occur directly on a blockchain via smart contracts.
How does it work?
The project will issue a governance token called WLFI.
This token will allow holders to vote on decisions regarding the platform, but will be non-transferable and non-profitable, which differentiates it from traditional crypto assets that can be traded or used to generate passive income.
The project partners have confirmed that 63% of the token supply will be available to accredited investors, without a pre-sale or venture capital allocation.
The remaining 37% will be split between rewards for users and the project team.
What is the token for and when is it launched?
The WLFI token is expected to launch soon, although the exact date remains uncertain.
The primary function of the token will be governance, meaning that token holders will have a say in the future of the project.
However, the token will be restricted to accredited investors, meaning only those with a net worth of over $1 million or other qualifications can participate, raising questions about the project’s goal of helping underserved communities.
Also read: Singapore’s DBS Bank launches Bitcoin and Ethereum options trading for institutional clients
What are the concerns?
Critics have expressed concerns that Trump’s involvement in a cryptocurrency business could pose a conflict of interest, especially given his current political ambitions.
The involvement of Hunt Herroan entrepreneur linked to a failed DeFi project called Dough Financingalso raised eyebrows.
Dough Financing collapsed earlier this year due to a hack that wiped out investor funds, casting doubt on the security of the new venture.
In addition, experts such as Ciara Torres-SpelliscyStetson Law professor, raised legal concerns that Trump’s crypto project could conflict with the Constitution’s emoluments clause if foreign governments use the platform to curry favor with his administration.
This concern stems from the nature of DeFi, which allows global participation without identity verification.
What does Trump say about this?
Although Trump has remained relatively tight-lipped about the details of the project, he said in a recent interview: “Cryptography is just one of those things we have to do, whether we like it or not.
His son, Donald Trump Jr.stressed the importance of Challenge by removing political influence from finance, stating: “Banking has become politicized. DeFi removes that political component.”
Despite skepticism and potential conflicts of interest, Trump’s foray into crypto has been widely welcomed by the blockchain community, reflecting crypto’s growing influence in American politics.
Trump commented on his move into cryptocurrencies during a Twitter Spaces event, saying he was “blown away” by the success of his NFT collections and the demand for cryptocurrencies to pay for them. He also praised his children, saying: “Barron talks about his wallets; he’s got four wallets or something, and I’m like, ‘What does he know?’ But he gets it.”
As Trump continues to champion crypto, the launch of World Liberty Financial could become a central issue in the 2024 election.
His involvement in the space will likely spark further discussion at Benzinga’s Future of Digital Assets event on Nov. 19, where industry leaders will explore the intersection of politics, finance and blockchain technology.
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