- On Wednesday, the World Liberty Financial (WLFI) price crashed by around 10% following a fresh controversy around the project and a major treasury loan event, declining its value to $0.089.
- Treasury borrowed 50.44 million USD1 from Dolomite using 3 billion WLFI tokens as collateral, which boosted the lending pool utilization above 100% and locked user funds. This makes withdrawals difficult.
- According to technical indicators, the cryptocurrency is currently in oversold territory.
On April 8, U.S. President Donald Trump-backed decentralized finance (DeFi) platform’s native cryptocurrency, World Liberty Financial (WLFI), price dipped significantly on a daily chart.
According to CoinMarketCap, the WLFI price has dropped by over 10%, declining its value from $0.099 to $0.089 with a market capitalization of around $2.82 billion. The daily trading volume holds around $90.51 million.
WLFI Borrowing Sparks Pool Crisis
There are serious questions currently raised about World Liberty Financial in the DeFi community after its treasury borrowed 50.44 million USD1 from Dolomite, the lending protocol that runs its World Liberty Markets platform. The treasury put up approximately 3 billion WLFI governance tokens as collateral for the loan, which happened over the last 5 days.
This transaction boosted the USD1 lending pool usage rate above 100%. Due to this, the available liquidity turned negative by about 232,000 USD1 tokens, which means that the pool simply ran out of money.
Deposit rates for users who supplied USD1 shot to 35.81% annual return, while borrowing rates hit around 30%. These high rates came from the sudden lack of liquidity.
Users who supplied USD1 to earn yield may now face delays when trying to withdraw their funds. Those funds are locked inside the treasury big borrow position. Its withdrawals could stay restricted until that position gets reduced or paid back.
If the price of WLFI drops sharply, the collateral value could fall below safe levels. That could trigger a forced sale of the 50.44 million USD1 position. The sale of such a large amount of WLFI all at once might create a heavy downward pressure on the cryptocurrency. It might also affect the entire pool and affect the users. The treasury collateral now makes up more than half of the total value locked in this Dolomite market.
World Liberty Financial launched World Liberty Markets in January 2026 to allow users to lend and borrow USD1 along with assets such as ETH, cbBTC, USDC, and WLFI.
Technical Indicators Point to Bearish Pressure
According to TradingView, the WLFI price is currently sitting around 22, clearly in the oversold territory. This confirms the recent sharp downfall in the cryptocurrency.
(Source: TradingView)
At present, everything is working against the project, and things are going south for WLFI. Moving averages, including the 10-day and 20-day, are now suggesting extreme sell signals as the current price sits below these trend lines.
At present, there is strong support at around $0.096 from recent session lows, while the next resistance level appears around $0.100.
Back-to-back controversies around the project have depleted investors’ trust in the project. The drop below major support zones forced sellers who viewed the token as vulnerable after a long consolidation zone.
After yesterday’s rally over the ceasefire buzz in the U.S.-Iran war, the Bitcoin (BTC) price has also slipped below $71,000. However, it still has steady institutional flows through exchange-traded funds (ETFs).
Despite the recent controversies, World Liberty Financial is continuously expanding its operations. Recent integrations include Aster DEX adopting USD1 as the mandatory settlement asset for real-world asset perpetual contracts.
Also Read: Morgan Stanley ETF Goes Live: Will Bitcoin Price Hit $75K Soon?
Source: https://www.cryptonewsz.com/wlfi-price-crashes-10-liquidity-crisis-loan/
