Chaos Labs has revealed that the Trump family project, World Liberty Finance (WLFI), has rapidly expanded its lending operations on the Dolomite platform, pushing WLFI collateral utilization close to its limit of 5.1 billion tokens. This activity is concentrated in two multi-signature addresses. Approximately 3 billion WLFI tokens have been used as collateral to borrow around $40.7 million, primarily in USD1 stablecoins. Another address has created a circular collateral structure using USD1 and USDC, with a liquidation threshold corresponding to a 75% drop in WLFI price.
Currently, USD1 utilization stands at 83.4%, while USDC utilization is at 90.19%, with a borrowing rate of about 5%. Including WLFI rewards obtained through Merkl, the supply rate reaches 10.64%, with the reward program ending in three days. The WLFI collateral size exceeds Binance's tradable volume by four times, with only 20% of tokens unlocked. The remaining tokens are expected to be released by mid-April. Following recent developments, the team has repaid approximately $10 million in USD1 and indicated the ability to supplement collateral. The team currently accounts for 82.7% of Dolomite's total value locked (TVL) and 85.3% of its lending, with on-chain funds highly concentrated and the structure's purpose unclear. The situation is ongoing.
World Liberty Finance Expands Lending on Dolomite, Nears Collateral Limit
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