Trump family’s WLFI token briefly overtakes XRP derivatives volume before 28% crash
World Liberty Financial's WLFI token officially debuted on September 1 after months of anticipation, drawing massive attention across the crypto market.
Within its first 24 hours, derivatives activity on WLFI surged beyond $13 billion, according to CoinGlass.
Notably, WLFI's derivatives volume nearly doubled that of XRP, the third-largest crypto by market capitalization.
Spot trading volumes also reached $4.7 billion, propelling WLFI into the ranks of the top 10 most-traded assets by volume on its opening day.
Traders rack up heavy losses
The WLFI launch brought a lot of anticipation and excitement, but volatility was right around the corner.
WLFI was priced above $0.33 when it started, but fell as low as $0.24 within hours of launch for an overall loss of more than 14%.
This loss led to an estimated loss of nearly $30 million in liquidity as leveraged traders were liquidated, as reported earlier.
All of this occurred despite the drop shortly after launching. Of course, the trading interest remains strong despite the decline, due to the support the project has received from the Trump family.
Buyback proposal
Along with the token's launch, World Liberty Financial proposed using protocol-owned liquidity fees to buy back and burn WLFI tokens in Ethereum, BSC, and Solana pools.
The plan, if supported by the community, would restrict circulating supply while rewarding long-term holders by increasing their relative ownership.
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At the same time, disclosures revealed that the Trump family owns 22.5 billion WLFI tokens, worth around $6 billion at launch pricing, with a vesting schedule that has yet to be determined.
In a statement, Kevin Rusher, founder of Real World Asset (RWA), says:
"From a monetary point of view, a $6 billion windfall is good news for the US President. However, the real impact comes down to whether retail investors lose money and whether the World Liberty platform can remain stable."
Previously, a 13-page document revealed that President Donald Trump's family could receive 75% of the coin's earnings.
Given the market cap of the WLFI token at $5.47 billion, the Trump family would be entitled to WLFI tokens worth $4.1 billion at press time. This is because, as of writing, the token is down over 28.23% and trading at $0.2231.
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The paper also stated that Trump and his family are not liable, noting that the project and tokens are "not political and have no affiliation with any political campaign."
Crypto's reputation at risk
Rusher says that speculative trading like WLFI could corrode the ”trust in crypto, and that's the opposite of what is required". He also claims, that in the long run, "it appears to be a more serious project than the $TRUMP memecoin, but that doesn't mean there will be a net benefit to retail buyers."
"Anyone watching the $WLFI spectacle unfolding yesterday would have been reminded of the 2021 DeFi summer, when Ethereum gas fees spiked to triple-digit dollar values at times. This shows that crypto is still, to a large extent, driven by hype and FOMO – not real value."