According to reports, the Trump family's core token "WLFI Token" announced at the last moment before its issuance that 25 billion tokens would enter circulation, approximately five times the 5 billion tokens previously expected by investors.
Written by: Dong Jing
Source: Wall Street Insight
The WLFI token launched by the Trump family faced a sharp decline after its listing on Monday, with the current trading price down about 25% from the issuance price, giving it a market capitalization of approximately $5.4 billion. This highly anticipated cryptocurrency project has shaken market confidence due to the last-minute disclosure of the circulating token quantity far exceeding investor expectations.
On September 3, media reports indicated that World Liberty Financial Inc. announced at the last moment before issuance that 25 billion tokens would enter circulation, about five times the 5 billion tokens previously expected by investors.
The company was co-founded by Trump’s sons Eric Trump and Donald Trump Jr., with Trump himself listed as an "honorary co-founder." According to information on the project’s website, the Trump family directly or indirectly controls over 20 billion WLFI tokens.
To stabilize market sentiment, World Liberty has removed 47 million tokens from circulation through a destruction mechanism, valued at approximately $11 million.
Analysts pointed out that the true test of the WLFI project lies in whether the World Liberty ecosystem can establish a solid footing beyond speculation.
Discontent Among Investors Over Circulating Supply Controversy
Investors have expressed strong dissatisfaction with the sudden change in the circulating supply of WLFI tokens. On World Liberty's governance forum, several investors questioned the data changes and the ambiguity surrounding the qualification of "early supporters."
It was disclosed that, out of a total supply of 100 billion tokens, most tokens remain non-tradable and are primarily held by insiders.
Billions of tokens will be allocated to Alt5 Sigma Corp., a publicly traded crypto payment company closely associated with several key figures at World Liberty. Alt5 recently agreed to hold about 7.5% of the total supply of WLFI and raised $1.5 billion in funding.
Online traders noted that estimates of the circulating supply ranged from 3% to 25%, exacerbating market confusion within hours of issuance. Morten Christensen, founder of AirdropAlert.com, stated:
"Ideally, the first-day performance should be good. Unfortunately, the team miscommunicated before the issuance, and the negative sentiment on social platform X turned the first day red (referring to a decline)."
Project Team Takes Stabilization Measures to Address Market Volatility
In the face of market turmoil, World Liberty Financial has taken several measures to try to stabilize investor sentiment.
According to previous articles, in addition to the already implemented destruction of 47 million tokens, the team also proposed to destroy some WLFI tokens received as transaction fees to reduce the circulating supply. This proposal has received broad support but has not yet been formally voted on by WLFI holders.
Despite the poor performance on the first day of trading, a spokesperson for World Liberty Financial still stated, "The issuance of WLFI has been a great success."
As mentioned in previous articles, Trump’s sons Eric Trump and Donald Trump Jr. both celebrated the listing of WLFI on social media on Monday. Eric Trump pointed out on platform X that the trading price of WLFI is much higher than the early round prices, using this as evidence of strong performance.
Additionally, reports indicated that the sharp decline in Alt5 Sigma's stock price highlighted the close connection between the company's fate and the WLFI token. On Tuesday, Alt5's stock price fell by 29%, and on Wednesday it dropped nearly 20%, reflecting the market's concerns about WLFI's performance spreading to the traditional stock market.
Although the tokens received by Alt5 Sigma can be traded, the company stated that its goal is to accumulate rather than sell. This underscores the extent of the company's fate being closely tied to WLFI.
Long-Term Challenges for Ecosystem Development
Analysts believe that the true test of the WLFI project lies in whether the World Liberty ecosystem can establish a solid footing beyond speculation. The project’s stablecoin USD1 already has a market capitalization of about $2.7 billion, and the team plans to launch lending and other services.
Dessislava Aubert, a senior analyst at Kaiko, stated:
"Volatility on the day of issuance is quite common. The recently proposed fee destruction mechanism may generate short-term speculation. However, long-term value depends on the adoption of the ecosystem, especially the USD1 that drives the use of WLFI, which, despite being listed on major centralized exchanges, faces fierce competition in the stablecoin market."
Lex Sokolin of Generative Ventures pointed out that considering WLFI's fully diluted valuation of over $20 billion, it has received more generous treatment than other similar crypto projects. "Compared to these comparable projects, WLFI has so far received a very friendly reception from the market," he said.
Early holder Bruno Ver stated that he originally planned to sell quickly but decided to wait: "At this point, I'm not worried; I'm just curious how the market will react and develop in the long term."
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