The post WLFI Crypto Price Plunges 83% as the Project Faces Loan Controversy appeared on BitcoinEthereumNews.com. Key Insights: WLFI crypto token drops over 80%The post WLFI Crypto Price Plunges 83% as the Project Faces Loan Controversy appeared on BitcoinEthereumNews.com. Key Insights: WLFI crypto token drops over 80%

WLFI Crypto Price Plunges 83% as the Project Faces Loan Controversy

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Key Insights:

  • WLFI crypto token drops over 80% from peak amid loan-related controversy.
  • The project used its own tokens as collateral to borrow $75M in stablecoins.
  • WLFI denies liquidation risk, says position remains safe and backed.

The WLFI crypto, a token linked to World Liberty Financial, backed by US President Donald Trump, has taken a sharp hit. The token is now down by more than 80% from its all-time high.

The sudden plunge in the WLFI crypto price has been linked to the project’s use of its tokens as collateral to get loan funds. Investors have become concerned due to fears of the risk associated with the token’s price continuing to decline.

WLFI Crypto Borrowing Activities Trigger Concerns

The recent crypto news from April 11, 2026, concerns WLFI, a crypto project backed by the Trump family. The focal point of the current controversy is the drop in the cryptocurrency’s price.

Importantly, the WLFI crypto token price has been falling to an unprecedented extent, prompting concern among investors. The token price has fallen to $0.0789 at press time, down 4.05% per day. The problem here is that the current price represents a massive 83% decline from its peak.

The negative sentiment is also reflected in the trading volume. Amid the ongoing debate, the community remains skeptical about WLFI’s future. This resulted in a 17% decline in daily trading volume to $216.78 million, according to CoinMarketCap data.

Importantly, the drop is attributed to the on-chain movement associated with World Liberty Financial wallets. According to reports, WLFI tokens were used as collateral in Dolomite’s lending protocol. The platform was co-founded by World Liberty Financial’s Chief Technology Officer, Corey Caplan.

This move has raised concerns because using a project’s own token as collateral can be risky. If the token price keeps falling, it could trigger forced liquidations. This may put further pressure on the market and increase losses for investors.

WLFI Loan Move Raises Fresh Risk Concerns

According to Arkham Intelligence data, a wallet linked to World Liberty Financial deposited about 5 billion WLFI crypto tokens on Dolomite. These tokens were then used as collateral to raise approximately $75 million in stablecoins, such as USD Coin and USD1.

However, other users on X have also pointed out that although WLFI is highly valued, it is not a liquid token. The implication here is that even a relatively small percentage of tokens sold during a liquidation can have a considerable effect on the token’s price.

Another group of users has likened the process to “borrowing against self-created value.” They added, “It’s the financial equivalent of printing casino chips, borrowing cash against them, and telling everyone else not to panic because the house still believes in the chips.”

WLFI Crypto Loan Controversy | Source: X

Adding to the concern, Dolomite itself is not among the largest DeFi lending platforms. According to DefiLlama, it ranks outside the top tier by total value locked. This could make the situation more fragile if volatility increases.

WLFI Responds, Dismisses Liquidation Fears

In response to rising fears and criticism, the WLFI team stated:

“Yes, we supplied WLFI as collateral and borrowed stablecoins. No, we are nowhere near liquidation — and frankly, even if markets moved dramatically against us, we’d simply supply more collateral.”

Thus, the team affirmed that there is no immediate risk of liquidation. The team confirmed that it used WLFI tokens as collateral to borrow stablecoins, but stressed that its position remains safe and well above danger levels.

The team also highlighted strong numbers to support its strategy, including an annual revenue run rate of nearly $160 million from its USD1 stablecoin. It added that it has bought back over 435 million WLFI tokens, worth more than $65 million, in the past six months to support the market.

Source: https://www.thecoinrepublic.com/2026/04/11/wlfi-crypto-price-plunges-83-as-the-project-faces-loan-controversy/

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