Overview
- WLFI, which fell roughly 12% to about $0.08 on Friday, slid after the team said its Dolomite borrowing position was safe and would be defended with more collateral if needed.
- On-chain data shows about 5 billion WLFI were posted on Dolomite to borrow roughly $75 million in USDC and USD1, driving the USD1 pool’s utilization to reported levels near 93% to 100% and constraining withdrawals for depositors.
- Records tracked by Arkham indicate more than $40 million of the borrowed stablecoins moved to Coinbase Prime within hours, pointing to potential conversion or institutional trading activity off exchange order books.
- World Liberty says it is nowhere near liquidation and can add collateral, while DeFi analysts warn WLFI’s thin trading depth could make forced selling unworkable and leave Dolomite lenders with bad debt if prices drop further.
- Dolomite’s co-founder serves as an advisor to World Liberty, drawing conflict-of-interest scrutiny, and the project says a vote next week will consider a phased unlock for early WLFI holders.