WLFI’s loans exceeding $31.4 million raise concerns about conflicts of interest

The project’s practice of using its own tokens as collateral for loans and transferring substantial assets, combined with the advisor’s role and the high pool utilization rate, further exacerbates liquidity risks.

Monitored by Woofun AI, the crypto project WLFI, co-founded by the Trump family, conducted multiple collateralized lending transactions through the DeFi protocol Dolomite, issuing approximately $31.4 million in stablecoins. On-chain data shows that some of these funds were later transferred to Coinbase Prime, potentially for cash conversion or over-the-counter trading. The whereabouts of around 3 billion tokens transferred by WLFI to various addresses in early April remain unclear. Of particular concern is the fact that Corey Caplan, co-founder of Dolomite and also an advisor to WLFI, currently controls approximately 55% of the liquidity in this protocol. Such a highly concentrated holding structure significantly increases systemic risks. On Dolomite, the utilization rate of the USD pool reaches nearly 93%, meaning ordinary depositors may face liquidity constraints and be unable to withdraw their funds at will. Given the limited depth of the WLFI token market, a price decline could trigger liquidation mechanisms, leading to a chain reaction of sales and increasing the risk of bad debts—costs that would ultimately be borne by other depositors. To date, WLFI has not issued any public response regarding these transactions or potential conflicts of interest.