Trump’s, World Liberty Financial—DeFi Delusion or Innovation?

The Trump family-backed World Liberty Financial project aims to bolster the dominance of the US dollar in the decentralized finance (DeFi) space. This initiative is being developed on a copy of the DeFi protocol Aave. By leveraging stablecoins to maintain a stable price, the project seeks to enhance the international influence of the US dollar, with the explicit goal of strengthening America's financial leadership. World Liberty Financial's stablecoin-centric strategy provides several key benefits. Firstly, by spreading stablecoins pegged to the US dollar globally, the dollar's status as an international medium of exchange can be maintained and reinforced. This helps to ensure the long-term financial leadership and influence of the United States. Secondly, stablecoins can enhance financial accessibility by providing financial services to those excluded from the traditional financial system. Reducing currency exchange costs and time in international transactions also improves transaction efficiency. Moreover, stablecoins contribute to the expansion of the DeFi ecosystem and offer the advantage of regulatory compliance. Lastly, in response to efforts by BRICS countries to reduce their dependency on the dollar, this project can help maintain and strengthen the global influence of the US dollar. However, this project carries significant risks. Numerous DeFi projects have been hacked, and there are many instances of 'rug pulls' that cause severe losses to early investors. According to a report by the security firm Halborn, the total losses from the top 50 DeFi hacks amount to $5.5 billion. This project started on a negative note as well. Social media profiles of Trump family members on X were hacked to make fake announcements, which Eric Trump labeled as a "scam." There was an incident where the social media accounts of Eric Trump's family members were hacked to promote a fraudulent cryptocurrency project. The X accounts of Lara Trump and Tiffany Trump were hacked, posting fake ads that seemed connected to the Trump family's real cryptocurrency project 'World Liberty Financial.' This incident could undermine the project's credibility and requires participants to be cautious and alert. Moreover, rumors linked the token 'RTR' to the Trump family, causing its market capitalization to soar to $155 million in a short time. Eric Trump vehemently denied on his personal social media that this token was an official project, leading to a 95% collapse in RTR's price. This highlights the risks of investing in the cryptocurrency market based solely on rumors without official confirmation. According to CoinDesk, the project team includes developers from the recently hacked application 'Dough Finance,' in addition to the Trump family members. At the heart of this project is an Ethereum blockchain wallet address wlfinancial.eth, which was an early investor in Dough Finance. It is unclear whether the owner of this address is directly connected to the Trump family project. World Liberty Financial plans to issue its cryptocurrency, WLFI. However, the allocation of about 70% of the total tokens to insiders raises questions about fairness and transparency. This could be particularly disadvantageous to early investors and could undermine the project's credibility. Trump appears to have a strategic plan for cryptocurrency. He recently pledged to create a national strategic reserve of Bitcoin and to appoint regulatory bodies favorable to the cryptocurrency industry. Additionally, he has launched a series of cryptocurrency-themed sneakers, showing active marketing efforts towards cryptocurrency. These factors suggest that while the World Liberty Financial project holds substantial potential, it is also fraught with considerable risks. The future progress of this project will need to be closely monitored.