Trump family project: nepotism, 70% of token distribution to "insiders," ultimate goal may be to replace Tether?

Author: Fu Ruo, Odaily Planet Daily

As the U.S. presidential election approaches, the recent actions of Trump, one of the presidential candidates, have drawn significant attention. In particular, the cryptocurrency project World Liberty Financial, led by Trump's son, has garnered interest from the crypto industry and the global financial sector.

Recently, CoinDesk revealed numerous issues in the draft white paper of the project, especially the unreasonable token distribution ratio and the centralization of the governance structure, which seems to contradict the project's previous claim of "returning the power of finance to the people." World Liberty Financial subsequently responded to CoinDesk's report, but aside from some trivial answers, they made no mention of governance and token distribution. This not only failed to dispel public concerns but also backfired, further increasing doubts about the project's fairness. (Note: The draft white paper was sourced from individuals within Trump's inner circle.)

Integrating existing market information to unveil the mystery of the World Liberty Financial project for readers.

70% Token Distribution to Related Parties, Nepotism

According to the draft white paper of World Liberty Financial obtained by CoinDesk, 70% of the project's governance token WLFI will be allocated to "insiders" such as founders, team members, and service providers, while the remaining 30% will be distributed through a public sale. To avoid scrutiny from the U.S. SEC for violating securities laws, all WLFI tokens will be non-transferable until they are unlocked through a governance process that complies with relevant laws.

This means that in the future, WLFI tokens are unlikely to be publicly traded on exchanges and can only be used internally as governance tokens, with dividend rights yet to be determined. To some extent, WLFI may resemble unlisted equity, only available for over-the-counter trading, requiring notification to project managers for ownership changes.

The draft white paper also reveals that the project is built on the Ethereum lending platform Aave and plans to promote the large-scale application of stablecoins and DeFi, helping the U.S. become the "global crypto capital."

In CoinDesk's report, they heavily criticized the token distribution method of World Liberty Financial, quoting industry insiders who called it "a ridiculous joke" to mock the project's centralization governance issues.

World Liberty Financial is also linked to the recently hacked lending project Dough Finance, with many team members coming from Dough Finance. Dough's founder, Zak Folkman, was formally registered as the owner of World Liberty Financial LLC. Furthermore, World Liberty Financial may have directly copied the code from Dough Finance in its early stages, raising doubts about the current code's security.

(Note: Dough Finance was attacked on July 12 by a flash loan exploit, with hackers profiting approximately $2.1 million, of which about 76 ETH (around $260,000) has been returned by white hat hackers. The attacker exploited a vulnerability in the Dough ConnectorDeleverageParaswap contract to transfer WETH directly from the vulnerable contract.)

In addition to Dough Finance team members, the Trump family will hold multiple roles in the project, with Trump being referred to as the "Chief Cryptocurrency Advocate," his two eldest sons serving as "Web3 Ambassadors," and his youngest son as a "DeFi Visionary."

Several of Trump's friends also hold important roles in the project. For example, well-known real estate developer Steve Witkoff serves as the head of institutional investment, his son Zach Witkoff is the head of intelligence, Alex Golubitsky, co-founder of the crypto governance consulting firm MetaleX Pro, serves as legal advisor, Gabriel Shapiro, co-founder of MetaleX Pro, serves as crypto governance advisor, Zak Folkman, founder of a dating platform, serves as operations manager, and Chase Herro, founder of venture capital firm Pacer Capital, serves as head of digital and strategy, collectively forming the leadership team of World Liberty Financial.

From the disclosed team members, one cannot help but question the professionalism of the project, especially considering it is a replica of a stolen project, with team members being appointed based on personal connections, and some members having no relation to the crypto industry.

Official Response: Ensuring Project Security

In response to CoinDesk's disclosures, World Liberty Financial quickly issued a statement.

The project team emphasized that they are collaborating with top security firms to ensure the safety of the project code. These partners include well-known companies like Zokyo, Fuzzland, PeckShield, and BlockSecTeam. The team stated, "We understand how important the project we are building is, and its potential impact on cryptocurrency and our country, especially with the upcoming election. We cannot afford to be careless; security is our top priority, and we will adopt industry best practices to ensure the safety of users' funds."

The project team also clarified that they will collaborate with the well-known lending project Aave to create a new DeFi lending platform on Ethereum, introducing a credit account system and a user-friendly interface for easy access to the project via wallets or brokerage services. World Liberty Financial is not a fork of Aave but aims to work with Aave to promote innovation and development in the DeFi space. The project does not intend to replicate existing DeFi protocols but hopes to collaborate to create a more robust and secure decentralized financial platform.

In addition to clarifying related controversies, World Liberty Financial introduced the project's core goal, which is to promote dollar-pegged stablecoins to ensure that the dollar continues to dominate global finance in the future. The project team believes that the dollar's global dominance is facing challenges from other countries, and the promotion of stablecoins will help maintain the U.S.'s leadership in international finance.

Team member Steve Witkoff stated that the project aims to provide lending rights to those who cannot be approved by mainstream finance. "DeFi is open credit for those who are excluded. Our credit market is the best in the world, yet it still excludes many people from borrowing and pursuing the American dream. When I started my business, I found someone who believed in me—my father, who lent me $20,000. Without him, I wouldn't have my business. World Liberty Financial will provide more people with the opportunity to pursue their dreams."

From World Liberty Financial's response, it is evident that they did not address the controversial token distribution and governance issues, which may support the partial authenticity of the draft white paper obtained by CoinDesk. Their response focused solely on emphasizing the security and originality of their protocol, which may make it difficult for those interested in the project and Trump to "buy in."

Conclusion

Previously, the market speculated on information related to World Liberty Financial, considering options ranging from CeFi to payments. After CoinDesk's disclosure, the mystery of World Liberty Financial has finally been unveiled.

Although the project team did not provide a definitive response to market concerns, the composition of the team members suggests that the core interests of the project are likely controlled by the Trump family, with specific details to be revealed in future official announcements. Given the recent negative public sentiment, the official version of the white paper may loosen its stance and offer more benefits.

One of the biggest challenges facing the World Liberty Financial project is that the X (formerly Twitter) accounts of Trump's wife Lara Trump and youngest daughter Tiffany Trump were hacked, with the hackers using these accounts to promote a cryptocurrency scam with a name similar to the project. Although the project team quickly issued warnings to users not to click on any suspicious links, many believe that if the Trump family struggles to control their own Twitter accounts, how can they ensure the security of their project?

All these issues have led the crypto industry to question the true intentions behind the Trump family's project launch. After all, existing information seems to indicate that World Liberty Financial lacks a solid operational foundation, and merely relying on Trump's favorable comments about the crypto industry in speeches may not be sufficient. Alternatively, they may be hoping for Trump's re-election success to leverage political influence to enhance project recognition, officially certifying their project to replace Tether's market position with a large-scale issuance of dollar-pegged stablecoins.