World Liberty Financial's token sale has raised only $11 million so far. Donald Trump and others who profit from the project will not make money.
Trump's DeFi project World Liberty Financial's long-awaited token launch turned out to be a disaster.
World Liberty's website crashed several times after the sale began at 12:47pm UK time on Tuesday. So far, investors have bought in 766 million Tokens — An obvious response after a project representative boasted about 100,000 sign ups to buy a token.
So far the sale has raised just over $11 million, a fraction of the project's lofty $450 million goal.
If WLFI token sales don't pick up, those who benefit financially from the project — including many members of the Trump family — could end up empty-handed.
World Liberty Financial is a DeFi protocol built on top smart-contract network Ethereum. It allows users to lend and borrow crypto assets like Ether and also plans to issue its own stablecoin.
Along with the token sale launch, World Liberty has for the first time provided a complete list of who will benefit from the project “Gold paper,” a Trumpian take on the popular crypto white paper.
In addition to the Trump family and project founders Chase Hero and Jack Folkman, many others will benefit, including longtime Trump friend and real estate developer Steve Witkoff and his children.
The paper also describes the complex company structure that operates in the context of the project.
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$450 million in sales
Like many other DeFi projects, World Liberty launched a token to pass some aspects of its governance to its community.
Many DeFi projects choose to launch tokens via airdrop in an attempt to stay on the right side of strict US securities laws.
World Liberty, on the other hand, is selling 35% of its 100 billion token supply to the public and US-based accredited investors.
Based on the amount of tokens sold and Collected moneyThe sale would net at least $450 million if sold.
Of this amount, $30 million will be earmarked for World Liberty's operating costs, in addition to other money the project will generate, the paper said.
Because World Liberty has yet to raise $30 million from its token sale, it faces problems before it even gets off the ground.
'Early Backers'
The rest of the money the protocol raises, more than $420 million, will be split among an inner circle of so-called “early backers” through three limited liability companies.
These supporters include Donald Trump and his three sons, Donald Jr., Eric and Barron; Project co-founders Folkman and Hero; Steve Witkopf and his sons Jack and Alex; Paxos co-founder Rich Teo, as well as several others.
The group will also split 30% of the total supply – 30 billion WLFI tokens.
That pales in comparison to the 2.5% — or 2.5 billion tokens — split between World Liberty's eight expert advisors.
It is not clear whether WLFI will ever have monetary value.
Once launched the token is not tradable and there is no guarantee that it will be forever. Goldpaper notes that the tokens will be “locked in indefinitely” for such time that they can be traded through a governance vote that does not violate US law.
Complex construction
Then there is the potential income of World Liberty. The protocol charges fees to those who use it, but the amount of these fees has not yet been revealed.
While World Liberty Financial is controlled by a Delaware-based holding company, its profits are distributed elsewhere.
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 Rico company owned by Hero and Folkman.
Hero and Folkman agreed to send 50% of the fees paid to them to WC Digital Fi LLC, another company associated with Steve Witkoff.
The deal is likely a nod to Witkoff's involvement in the concept of World Liberty Financial. It was Wittkoff who first introduced Hero and Folkman to Trump's sons.
In any case, these groups will not receive any protocol income until World Liberty Financial is up and running. The launch date of the project is yet to be revealed.
There is Tim Craig News' Edinburgh-based DeFi correspondent. Reach out with tips at [email protected].
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