WLFI: From the White House to the Chain The Four-Level Narrative of Rise in a Year

Introduction: In one year, from the white paper to the dispute center

World Liberty Financial (WLFI) was officially announced on August 26, 2024, at that time the Trump family made the first public announcement of the project through social media and official statements.In just a few weeks, the project isRelease of the white paper on September 16, andToken pre-sale will be launched in October.

Since then,WLFI enters the market vision at an astonishing pace: launching the USD1 stablecoin in the first half of 2025, then binding to the listed company ALT5 Sigma, and officially launching the governance token $WLFI on September 1.In just one year, it has grown from a new project led by a political family to a “phenomenon sample” that cannot be ignored by the global media, investors, regulators and communities.

The WLFI story is not just a roller coaster of the price of a new coin, it also carries theStablecoin experiment, wealth effect, political symbols and governance paradoxFour-fold narrative.This report will start from these four perspectives and comprehensively analyze the rise and concerns of WLFI.

Main Line 1: USD1 and cross-chain settlement layer – from “capable” to “used”

1.1 The original design intention of USD1

USD1 is WLFI’s core stablecoin and assumes the role of the “settlement layer” of the ecosystem.Its biggest selling points are security, transparency and compliance:

Hosting: Reserves managed by BitGo.
audit: Crowe LLP issues audit reports every month.
Reserve composition: As of the end of June 2025, the reserve scale was US$2.207 billion, of which 85% were government money market funds, 15% were cash or equivalents, and there was over-collateralization.
Target: Avoid the common “death spiral” of algorithmic stablecoins, and at the same time enhance the trust of institutional investors.

This combination is closer to the USDC/USDT mode, rather than the Terra UST-style algorithmic stablecoin.

1.2 Cross-chain technology and ecological penetration

On September 1, WLFI announced the integration of Chainlink CCIP (cross-chain interoperability protocol) to support the secure transfer of mainstream public chains such as Ethereum, Solana, and BNB Chain.CCIP adopts the Cross-chain Token Standard (CCT) to provide technical guarantees for the multi-chain circulation of USD1.

CMC and multiple media reports confirmed that USD1 has been implemented on Solana and cooperated with liquidity agreements such as Raydium and Kamino.This cross-chain layout means USD1 has the potential to become a universal settlement currency for multi-chain DeFi.

1.3 Practical application: from narrative to usage

However, what really determines the value of USD1 is not “capable” but “used”.Current applications include:

Lending: Dolomite on Ethereum connects USD1 as core collateral.
LP and liquidity: Lista DAO on the BNB chain establishes a USD1 mobile pool with Pancake.
Pledge and cross-chain:StakeStone provides pledge income and cross-chain liquidity.
RWA Cooperation: Try to embed USD1 into the on-chain USD bond funds and RWA public chains with Ondo, Plume and other projects.

The key to the future is:Is the scale of real transactions and borrowings denominated in USD1 continue to grow.If it only stays at the level of “political narrative” and “technical demonstration” and cannot form high-frequency settlement flows, then its basic value is still doubtful.

1.4 Research Inspiration

For researchers, the value of USD1 can be measured by a new indicator:

Stable Utilization Ratio (SUR) = USD1 Actual settlement amount in the DeFi ecosystem ÷ Reserve scale.

If SUR can gradually increase from the current single digit to 50%, then the status of USD1 is truly solid.

Main Line 2: “cognitive misalignment” between token economy and initial circulation

2.1 TGE launch and price performance

Time: September 1, 2025.
Initial price: about $0.20.
Highest point: about $0.32.
First day declined: to $0.225.
Fully diluted valuation (FDV): up to $23.1 billion.
Actual circulation: 24.67 billion pieces, accounting for 24.7% of the total supply.

The market originally expected the initial circulation to be 3 billion to 5 billion, but the actual circulation to be 8 times higher, which directly led to price pressure.

2.2 Information disclosure and Investor misunderstanding

WLFI official emphasizes “fair launch”:

No advance token transfer.
The founding team does not sell.
Priority retail investors.

But there is a message difference in the “unlocking rhythm”.Although partially unlocked tokens (ecological/strategic reserves) are not circulated in the short term, the market still counts them as “sellable pressure”, forming pessimism.This “cognitive misalignment” has led to a 40% rapid callback after going online.

2.3 Burning and deflation narrative

September 2: Officially initiates a governance proposal to use 100% of the treasury liquidity expenses to repurchase and burn tokens to create a deflation model.
September 3: Execution of 47 million WLFI burned, accounting for about 0.19% of the supply.
On-chain action: Multiple signing agreements complete the destruction and repurchase about US$2 million tokens from the market.

Despite frequent actions, the market generally believes that the effect is limited and criticizes it for being a “drop of the bucket”.

2.4 Giant Whale and Wealth Effect

Early investors: Low-priced chips (US$0.015–0.10) have a floating profit of up to 20 times in the TGE stage.
On-chain data: Some early addresses quickly transferred tokens to the exchange to cash out.
Trump family: Holds about 20.6 billion WLFIs with a book value of billions of dollars.

This wealth effect further aggravates the community’s doubts about “projects serving giant whales.”

2.5 Research Inspiration

Token economy research should be divided into two curves:

Nominal unlock curve: The official total unlocked amount.
Actual circulation curve: The amount of tokens that can be used and may be sold on the chain.

The gap between the two is often the key to market sentiment and price fluctuations.

Main line three: “Treasury + listed company” binding and political symbol

3.1 Intervention of ALT5 Sigma

What’s special about WLFI is its in-depth binding with the listed company ALT5 Sigma:

ALT5 Sigma announced that it would buy 7.5 billion WLFIs for $1.5 billion, priced at about $0.20.
There are cross-appointments between ALT5 executives and the WLFI team.
The media calls it the “MicroStrategy-like model”, which means to include tokens in the finances of listed companies and form a “treasury holding”.

This arrangement not only provides formal financial endorsement but also brings additional compliance and scrutiny pressure.

3.2 Traffic premium for political symbols

Trump’s family holds positions: Eric Trump and others publicly support it, and the family has a book wealth of billions of dollars.
Public opinion support: The media frequently reported on “Trump Family Crypto Empire” to directly increase market attention.
Risk superposition: Political events (such as election cycles, regulatory hearings) may become the trigger points for price fluctuations.

This makes WLFI a narrative case of the triple intertwined “politics-financial-technology.”

3.3 Board of Directors Changes and Compliance Signals

September 10: Eric Trump is demoted from ALT5 Sigma director to “Observer”.
Impact: On the day of the news, WLFI fell 7% to $0.1963.
Reason speculation: It is related to Nasdaq compliance communication.

This shows that although politics and listed company narratives can bring attention, they may also be quickly backfired due to compliance issues.

3.4 Research Implications

Investors should include the “Politics/Public Opinion Calendar” in the risk model:

Campaign node.
Regulatory hearings.
Personnel changes of the board of directors.

These events tend to trigger market volatility faster than technology or token economy.

Main Line 4: Decentralization vs. Gate-up governance

4.1 Blacklist Events

September 4–5: WLFI blacklists Justin Sun’s address (which holds approximately $107 million WLFI).
Reason: The project party calls it “risk mitigation” to prevent malicious activities.
Consequence: It triggered the community’s concerns about “centralized authority”, and the price plummeted by 10%+.
Sun responded: It said the freezing was unreasonable and provided 20% APY deposits through HTX, further aggravating market doubts.

4.2 The nature of governance model

Although WLFI is known as a governance token, it:

Proposals require company pre-examination.
The company has the final veto.
Governance is closer to “gateway” than completely decentralized.

This model has advantages at the compliance level (can quickly deal with blacklist incidents), but it diverges from DeFi’s decentralized spirit.

4.3 Community public opinion and media criticism

Reuters, CoinDesk and other media have repeatedly emphasized the issues of “governance centralization” and “political and family profitability”.
The community calls it a “digital oligopoly model” and questions that it is just beautifully packaged centralized finance.

4.4 Research Implications

Future research should focus on “governance authority transparency”:

Is the blacklist mechanism open and transparent?
Is there a complaint/unlocking mechanism?
Are the reasons for rejecting the governance proposal made public?

If these issues remain unresolved for a long time, governance models will become the biggest structural risk for WLFI.

Key events in September and market reactions

9/1: The token went online, and the price rose and fell rapidly.
9/2–3: Burned 47 million pieces and proposed a deflationary governance proposal.
9/4–5: Justin Sun’s address is frozen and the dispute escalates.
9/6: Price rebounded to $0.2152.
9/8: Prices plummeted by 10%+ due to manipulation controversy and HTX incidents.
9/10: Eric Trump was downgraded to observer and the price fell to $0.1963.

Overall, WLFI price fluctuations are driven more by public opinion and governance events than purely supply and demand.

Investor/Researcher List (Quantitative Monitoring)

Supply side action

Burn/repurchase scale and frequency.
Price changes for 24h and 72h after action.

Governance/Permission Events

Blacklist freeze/unlock time point.
The correlation between public opinion and price.

Cross-chain and settlement usage rate (SUR)

USD1 settlement amount in loan/LP.
Multi-chain active address and retention.

Compliance/personnel changes

ALT5/Nasdaq Communication Node.
Board of directors personnel adjustment.

Market structure

Trading behavior of the top ten positions.
Exchanges’ high-yield products (such as HTX 20% APY) are linked to prices.

Conclusion: Future narrative and risk hedging

WLFI is an unprecedented case: it is both an experiment in stablecoins and cross-chain technology, and a symbol of political family capitalization.ThatTechnical milestones (CCIP Cross-chain, USD1 Reserve), Token Economic Action(Burning and deflation proposals),Governance events(Blacklist, director changes) jointly created a “high volatility, high controversy, high traffic” project.

In the coming months, the trend of WLFI will depend on:

Real Usage Rate (SUR) of USD1Can it grow steadily?
Governance eventsQuestions about whether to be transparent and reduce “centralized manipulation”.
Political and compliance risksHow to be digested by the market.

WLFI may be a “political experiment” in the crypto market. It provides not only a speculative target, but also an investor test.Narrative, system and market powerExcellent case of how to intertwin.