The Infinite Money Glitch? WLFI Borrows $75M Using Its Own Tokens as Collateral

In a plot twist that would make even SBF scratch his head, WLFI—the Donald Trump-endorsed World Liberty Financial token—plumbed new depths on Saturday as degens uncovered the project essentially mooning its own bags to secure a $75M loan. Apparently, when you can't find a bank willing to lend against your bags, you just borrow from yourself. Revolutionary, truly.

The token touched a nauseating low of $0.07714, representing an 83% haircut from September's glory days when WLFI mooned to a mighty $0.46. For those keeping score at home, that's a worse trade than buying the top of the top of the top. WLFI currently trades around $0.07879, down 4.66% in 24 hours, because apparently gravity works extra hard on governance tokens with political connections.

Here's where things get spicy: wallets connected to World Liberty Financial deposited approximately 5 billion WLFI tokens on Dolomite—a decentralized lending platform co-founded by CTO Corey Caplan—then used these very tokens as collateral to borrow $75 million in USD1 and USDC. Over $40 million of that sweet stablecoin yield then landed on Coinbase Prime. Nothing to see here, just your friendly neighborhood circularity engine running on vibes and tokenomics.

DeFi analysts are understandably sweating this one, warning that should WLFI's price drift lower toward liquidation levels, lenders on Dolomite might find themselves holding bags they'd rather not explain to their LP. It's giving "too big to fail" energy, except the failure would just be regular-sized and extremely embarrassing.

"WLFI has almost a $10 billion FDV," noted one X user with a Keynesian understanding of supply and demand, "but it is not an extremely liquid asset. So imagine what would happen if 5% of WLFI's total supply would suddenly need to be sold to liquidate the position." Excellent question, hypothetical scenario, very calm and normal thing to wonder about.

Another degen on X offered what might be the most honest summary: "It's the financial equivalent of