Trump-backed DeFi Platform Prepares to Onboard Users

World Liberty Financial (WLFI), a newly launched DeFi platform backed by the former president Donald Trump and his family, has initiated a Know Your Customer (KYC) process for the sale of its WLFI token, as announced by the project.

The platform raises questions about its attractiveness since it features a non-transferable governance token. Also, there are loads of other platforms out there.

The project said that its current whitelists, which grant early access to its services, are open to US accredited investors and all non-US citizens. Investors who do not meet specific financial criteria set by the U.S. Securities and Exchange Commission (SEC), therefore, are unable to participate in the whitelist.

Trump Goes Crypto

An individual or entity can qualify as an accredited investor if he meets certain criteria under the SEC’s rules, like his earned income exceeding $200,000 or his net worth exceeding $1 million.

WLFI noted that it is actively working to ensure all Americans can access the platform. However, due to regulatory restrictions, this objective may not be achieved at the time being. The project is still optimistic about the future and plans to make its platform accessible to all Americans in the near future.

“We plan for all Americans to be able to use this platform in the future, giving everyone access to the tools and opportunities that have been restricted for far too long,” said the project.

World Liberty Financial?

There aren’t many details surrounding the Trump-backed World Liberty Financial.

So far, what has been revealed is that Trump will be the project’s ‘chief crypto advocate,’ Eric Trump and Donald Trump Jr. will take the role of Web3 ambassador, and Barron Trump will join the project as ‘DeFi visionary.’

The platform is expected to operate on the Ethereum blockchain and DeFi protocol Aave in order to facilitate borrowing and lending services for digital assets.

The WLFI token will be the platform’s governance token. It is a non-transferable token with the only utility is to allow holders to have voting power within the ecosystem. WLFI holders will not be able to sell, buy, or trade the tokens, which raises questions about its investment potential.

According to reports, 63% of WLFI tokens will be distributed in public sale and 20% will go to the founding team, here including Trump and his sons. 17% of tokens will be allocated to users as rewards.

WLFI aims to offer financial services that promote the use of stablecoins and decentralized finance. Its vision is to bring opportunities for the unbanked or underserved, who struggle to access traditional banking services.

1/6 The World Liberty Financial whitelists are now OPEN. Backed by Donald J. Trump, we will onboard the next wave of users into the future of finance. Join the movement here: https://t.co/YLcCq49uac

— WLFI (@worldlibertyfi) September 30, 2024

It Will Get Users…

With high-profile backing, WLFI is drawing attention. However, its vague operational details and restrictive access are the point of criticism. Skeptics have pointed out that limiting access to accredited investors contradicts the stated mission of aiding everyday Americans.

The token allocation strategy has also drawn scrutiny regarding the concentration of power among insiders.

Mark Cuban, a top-tier American entrepreneur, called Trump’s efforts in DeFi, alongside other moves with NFTs, are “desperation.” Anthony Scaramucci, founder of SkyBridge and former Trump White House director, criticized WLFI as a “scammy grift” that could undermine legitimate digital finance efforts.

Unlike Cuban and Scaramucci, David Nikzad, co-founder of DeFi.Gold, views Trump’s involvement as a positive development that could bring huge attention to the crypto space. He believes Trump’s “bold tactics” could help legitimize DeFi by attracting new users.

There are also mounting concerns about the project’s impact on Trump’s presidential bid, which is only a few weeks away. Nic Carter, co-founder of Castle Island Ventures, called for collective action to prevent the launch of WLFI as he feared it could damage Trump’s electoral prospects.