What is World Liberty Financial and USD1?

Author: TokenInsight Research

Summary:

• WLF's current core product is the USD1 stablecoin, which is a stablecoin pegged to the US dollar at a 1:1 ratio and fully backed by cash and US Treasury reserves.
• The rapid circulation of USD1 is mainly due to a $2 billion equity investment in Binance by the Abu Dhabi Investment Company MGX, in which USD1 was chosen as the payment currency. Currently, the amount of USD1 held in a wallet address associated with Binance is roughly equivalent to this $2 billion.
• WLFI is a purely governance token; it does not confer any dividends or profit-sharing rights, nor does it represent any equity stake in the project company.

World Liberty Financial (WLF) Overview

World Liberty Financial (WLFI) is a newly established decentralized finance (DeFi) platform closely related to former U.S. President Donald Trump and his family. The company was founded at the end of 2024, with the mission of achieving "DeFi democratization" by providing transparent, convenient, and secure financial tools to a wide audience. In fact, WLF is building a DeFi ecosystem that has its own governance token (WLFI) and a dollar stablecoin (USD1). WFI is also developing DeFi lending services (in collaboration with Aave) and DeFi applications, but currently, neither of these services has been launched.

Leadership and Ownership

The leadership of WLF includes members of the Trump family and senior cryptocurrency entrepreneurs. Trump himself is listed as the "honorary co-founder" of the company, which means he was a co-founder but was relieved of his duties after taking office as President of the United States. His sons Eric Trump, Donald Trump Jr., and Barron Trump are all listed as co-founders. Other co-founders of the company include Zachary Witkoff (son of Trump's Middle East envoy Steven Witkoff), Zach Fockman, and Chase Harlow.

Source:

A business entity related to Trump owns 40% of World Liberty and is entitled to 75% of the token sale revenue.

Source of information:

According to U.S. Senate investigators, this arrangement has yielded substantial returns — WLFI token sales have raised over $400 million. Notably, by early 2025, WLF raised $550 million through two rounds of WLFI governance token sales, attracting over 85,000 KYC-verified participants from around the world.

What is USD1?

USD1 is a stablecoin pegged to the US dollar, launched by World Liberty Financial in March 2025. Its goal is to maintain a stable value of 1.00 USD per USD1 token through full backing by fiat assets. Each USD1 token is 100% collateralized by high-quality reserve assets, including US dollar cash deposits, short-term US Treasury bills, and other cash equivalents. This means that WLF holds an equivalent amount of US dollar reserves for every 1 US dollar in circulation, and the tokens can be exchanged 1:1 for actual US dollars, similar to well-known stablecoins like USDC and USDT.

The growth trend of ### USD1

USD1 experienced explosive growth in adoption during the initial months, making it one of the fastest-growing stablecoins to date. USD1 was launched in late March 2025 and had remained low-profile for a few weeks before a surge in circulation in late April. As of April 30, 2025, the circulating value of USD1 had reached approximately $2.1 billion.

Source of information:

Objectively speaking, USD1 was born only five weeks ago and has already reached a market value of several billion dollars—this growth rate is unmatched by any previous stablecoin. This rapid growth is primarily due to one important factor: Abu Dhabi's MGX company made a $2 billion exclusive investment in USD1, and MGX chose USD1 as the trading vehicle.

Essentially, an institutional use case has almost overnight skyrocketed the supply of USD1 from near zero to billions of dollars (see the chart above). By mid-2025, the market capitalization of USD1 is hovering around $2.2 billion, making it one of the largest stablecoins in the world.

trading volume and liquidity

With the surge in supply, trading activity for USD1 is also quite active. From May to June 2025, its daily trading volume often reaches hundreds of millions of dollars, and sometimes the 24-hour trading volume even exceeds one billion dollars. For example, on June 30, 2025, the 24-hour trading volume was approximately 1.4 billion dollars. Such trading volume indicates active usage, but it is worth noting that a significant portion of this trading volume may be concentrated in a few venues, and may even reflect a large amount of over-the-counter swap trading associated with institutional trading.

USD1 ranked fourth in 24-hour trading volume

Source:

Liquidity was initially a problem, as it was limited to Uniswap pools, PancakeSwap pools, and a few exchanges. This meant that retail investors might encounter slippage when making large buy or sell orders. However, the situation has improved with the involvement of market makers and increased support from exchanges.

Adoption and Use Cases of DeFi

The BNB chain of Binance is the focus of the USD1 growth. 97% of the USD1 supply is on the BNB chain, and most of it is stored in Binance's hot wallet.

Source of information:

Source:

Although the current use cases of DeFi are limited, WLF is actively expanding the influence of this stablecoin within the ecosystem. For example, WLF has collaborated with Re7 Labs, based in London (a subsidiary of the DeFi hedge fund Re7 Capital), to launch a USD1 lending vault on Euler Finance and Lista, both of which are DeFi lending protocols based on the BNB chain. This integration means that users will soon be able to deposit USD1 into the vault to earn yields or use it as collateral for loans, thereby enhancing the utility of this stablecoin in DeFi.

WLFI Token Structure

The WLFI token is at the core of the World Free Finance (WLF) ecosystem, aimed at facilitating governance and operational activities within the platform. The WLFI token grants holders voting rights on certain protocol matters, including setting new parameters and making strategic decisions regarding the platform's development.

However, although the WLFI token grants voting rights, the project clearly states that WLFI is not a DAO token, and World Liberty Financial is not a decentralized autonomous organization (DAO). Instead, World Liberty Financial is a non-stock corporation registered in Delaware and has a board of directors. As a non-stock corporation, it does not have shareholders but has members, who are currently the members of the board of directors.

This distinction means that, from a legal perspective, the WLFI token does not grant any economic benefits to the company. Moreover, WLFI holders are not considered members of World Liberty Financial, thus they do not have direct ownership or economic interests in the company.

In addition, all WLFI tokens are non-transferable and will be locked in the wallet or smart contract indefinitely. These tokens will remain locked unless they are unlocked through a governance process, provided that such actions comply with applicable laws.

Token allocation and public sale

The total supply of WLFI tokens is set at 100 billion, distributed as follows:

• 35% (35 billion tokens) for public sale.
• 32.5% for community development and incentives: This allocation plan is reserved for expanding participation in WLF community governance and building the protocol.
• 30% for initial supporter allocation
• 2.5% for the team and advisors

Risks and Concerns

Although the USD1 from World Liberty Financial presents exciting prospects, it also comes with certain risks and concerns that investors should carefully consider.

The most prominent concern is that the current President of the United States (or his close relatives) profits from private stablecoin projects, which clearly presents conflicts of interest and governance issues. This situation is unprecedented. Legislators and regulators have taken note of this — U.S. Senators Elizabeth Warren and Jeff Merkley have publicly criticized the $1 transaction and the entanglement of WLF with the Trump family. The senators emphasized that an entity associated with Trump controls 40% of WLF shares (and claims to possess 75% of its cryptocurrency revenue), while Trump is listed as a key figure on the WLF website, blurring the lines between public service and private interests.

The trading of MGX with Binance is also highlighted as concerning: "Foreign government-backed capital and a compromised cryptocurrency platform may directly funnel funds to Trump and his associates... Trump and the Witkoff family may therefore be involved in this transaction, which amounts to hundreds of millions of dollars." Such a strong statement suggests that USD1 may face strict regulatory scrutiny, investigations, and even legislative actions aimed at curbing it.