Donald Trump’s victory in the US presidential election has been a boon for financial markets: The S&P 500 is on a tear and Bitcoin’s price has hit all-time highs on three consecutive days.
But there’s been one notable laggard: Trump’s own crypto project, World Liberty Financial.
Since the election, the company’s cumulative profit from sales of its token, WLFI, are up 4% to $15.4 million, according to data on Dune. The token itself cannot be traded on secondary markets, however.
That marks the token’s best three-day performance since its launch in October. But it’s a far cry from the rest of the crypto market, which has jumped almost 11% since US Election Day on November 5.
That suggests the president-elect’s pro-crypto stance and deep ties to the project have done little to overcome factors that have limited its appeal to investors.
Trump and his sons have promoted the company on social media, and the president-elect’s image is featured prominently on its website. He and his family own the rights to hundreds of millions of WLFI tokens as well as 75% of any revenue World Liberty generates.
Members of the Trump family neither founded nor own the company, according to a disclaimer on the website. Rather, Trump is listed as “advocate” and his three sons, Eric, Donald Jr., and Barron, as “ambassadors.”
Despite the endorsement of one of the world’s most famous men, the project has been a dud.
The company aimed to sell $300 million in tokens, according to a road map shared with prospective investors and reviewed by The Block.
But tepid interest forced it to scale back those ambitions. World Liberty only plans to sell $30 million in tokens before “terminating” the sale, according to an October 30 regulatory filing.
WLFI has several factors that limit its appeal. Most notably, it is unclear whether the token will ever have a monetary value.
WLFI tokens will be “locked” until investors vote to enable trading, according to a “gold paper” — a Trumpian spin on the crypto practice of releasing white papers that provide an overview of new products.
What’s more, only accredited investors who meet certain financial criteria are allowed to buy the token from World Liberty.
So-called governance tokens like WLFI are used in crypto to distribute ownership and control of a project among its investors.
WLFI holders will have relatively limited control, however. They have no say in the operation of the company itself, but will be able to vote on upgrades to its underlying technology.
According to the gold paper, the company will provide “information and access to third-party DeFi applications.”
That includes noncustodial crypto wallets, lending pools, and lending-and-borrowing protocols. Aave, a lending protocol, will be the first that World Liberty users can access.
Aleks Gilbert is a New York-based reporter covering DeFi. You can contact him at aleks@dlnews.com.
