- World Liberty Financials (WLFI) reportedly deposited 5 billion $WLFI tokens as collateral to borrow $75 million.
- WLFI accounts for a significant share of Dolomite liquidity.
- Insider links and locked user funds have sparked panic and the price of WLFI is down by 10%.
World Liberty Financial’s WLFI token has dropped down by 10% today, April 10, 2026 as per CoinMarketCap. With this drop, the price of the token is hovering around the $0.08 mark. While the WLFI token is experiencing a downfall, the broader crypto market is up by 0.6% in the last 24-hours as per CoinMarketCap.
According to Arkham Data, WLFI deposited 5 billion of its own tokens, which were worth about $440 million, as collateral on the Dolomite lending protocol to borrow $75 million in stablecoins. More than $40 million then followed to Coinbase Prime, and this sparked fears of risky leverage and caused the price of the token to drop. However, the WLFI team stepped up and clarified their points in a series of X posts today, April 10, 2026.
At press time, the price of the token stands at $0.08255 with a drop of 9.54% in the last 24-hours as per CoinMarketCap.
Insider Ties and Liquidity Lockout Fuel Sell-Off Panic
The situation escalated because concerns were raised over insider connections, as Dolomite’s co-founder, Corey Caplan, is also linked to WLFI. This raised fears of the project supporting itself.
WLFI borrowed so much from Dolomite that it used up 100% of the available funds, meaning other users cannot withdraw or use their money right now.
Now what gets more concerning is the fact that WLFI now controls more than half of Dolomite’s liquidity. If the price of WLFI token drops, it could trigger forced selling (liquidations). This selling could crash the price further and create losses for Dolomite.
The trading volume increased by 109.79% in the last 24-hours, which indicates that people are rushing to sell WLFI tokens.
On top of all of this, 3 billion WLFI tokens were also moved to another wallet recently, and no one knows why and this has added another layer of ambiguity to the current situation.
WLFI Team Slams FUD
Earlier today, WLFI strongly pushed back saying the criticism is wrong and that their borrowing is actually a smart move. WLFI, through a series of X posts, explained that they are one of the biggest users on the Dolomite platform, using WLFI tokens as collateral to borrow stablecoins. Additionally, they clarified that they are not close to being liquidated, even if the price of the token falls, they can just add more funds. They say this is normal in lending.
Let’s talk about the FUD going around our WLFI Markets lending position.
It’s wrong. Here’s what’s actually happening — and why the real story is a lot more interesting.— WLFI (@worldlibertyfi) April 9, 2026
Through the posts, WLFI also argued that by being a major borrower, they help generate high returns for users earning stablecoins, better than traditional finance. Their stablecoin, USD1, is reportedly generating strong annual revenue.
To show confidence, WLFI said that they bought back 435 million tokens over six months, spending more than $65 million. They added this was done because they have a strong belief in the project.
They also mentioned a new proposal coming soon so that the early users can unlock tokens slowly over time, aiming to support long-term growth.
USD1 Upgrades Aim to Strengthen Long-Term Vision
Amid all of this drama, through the X post, WLFI also talked about USD1 rolling out some major updates. Users and AI agents can now send money without paying gas fees, making it easier to use. It is also built to work smoothly with AI-based payment systems, while adding features like fund freezes to meet regulations.
Even though these changes have been implemented, everything continues to work without disruption. WLFI says USD1 is designed for the future of AI-driven finance, and while critics focus on the borrowing issue, the team believes they are steadily building long-term value.
Bearish Outlook Lingers
The drop decoupled from market gains, confirming coin-specific fear. A governance unlock could add selling pressure, keeping sentiment bearish. Without a credible fix, pressure mounts toward $0.07. If they deliver, this FUD could fade into a buy-the-dip-story.
This whole situation is unsettling because it combines heavy leverage, insider-linked infrastructure and locked liquidity, all at once. If the token price drops any further, forced liquidations could trigger a cascading sell-off, impacting both WLFI and Dolomite users. This raises broader concerns about transparency, risk management and how quickly confidence can break in DeFi markets.
Also Read: WLFI Price Falls 4% Following Link to Sanctioned Entity
