World Liberty Financial, a crypto project associated with Donald Trump, has reduced its fundraising goal from $300 million to $30 million, a decrease of 90%, due to much lower than expected sales of WLFI tokens.
This reduction could impact the expected remuneration of Donald Trump, whose entity DT Marks DEFI LLC was supposed to receive 75% of the ‘net revenues of the protocol’ generated by World Liberty Financial, provided that the company accumulated a war chest of $30 million, which has not yet been achieved.
The lack of investor interest is attributed to the absence of solid fundamentals for the WLFI token, described as a simple governance token without a mechanism to increase its value, and for a protocol that does not yet exist, according to analysis by Galaxy Digital.
World Liberty: A 90% Reduction in Fundraising Goal
The crypto project associated with Donald Trump, World Liberty Financial, has significantly revised its ambitions after sales of WLFI tokens fell well short of initial expectations. According to a regulatory filing, the company has lowered its fundraising goal from $300 million to just $30 million, a dramatic 90% reduction. World Liberty Financial stated in an SEC document dated October 30 that WLFI sales will ‘terminate’ once this new goal is reached, meaning hopes for a quick windfall for the former president could fade away.
Remuneration Dependent on Sales Success
For Trump, this setback could have significant financial repercussions. An entity controlled by the former president, DT Marks DEFI LLC, is supposed to receive 75% of the ‘net revenues of the protocol’ generated by World Liberty Financial, including token sales. However, this remuneration is dependent on first accumulating a war chest of $30 million to fund operations. To date, the company has struggled to reach half of that amount, having collected approximately $14 million in cryptocurrency since the launch of WLFI sales in mid-October.
Lack of Interest and Fundamental Shortcomings
The launch of WLFI initially generated some excitement, even causing the website to crash on launch day, but this interest did not last. The rapid disinterest from investors could be attributed to the lack of solid fundamentals. Galaxy Digital pointed out in a research note that the WLFI token has no mechanism to increase its value. It is simply a governance token on a protocol that does not yet exist. This uncertainty has made investors cautious, hesitant to commit their money to a project without clear foundations.
Vague Promises and a Complex Structure
World Liberty Financial still holds approximately $288 million in ‘non-transferable digital tokens,’ according to the SEC. However, the company does not intend to sell more than $30 million before closing the campaign. Despite this decision to reduce the supply, the World Liberty website continues to display the previous $300 million goal. To date, nearly one billion WLFI tokens out of the 20 billion issued have been sold, valued at $1.5 billion, but they remain inaccessible on secondary markets, preventing holders from monetizing their investment for now.
Trump, on the other hand, could still receive a significant sum if the project were to take off. DT Marks DEFI LLC is set to receive 22.5 billion WLFI tokens, valued at over $330 million at the public price set by World Liberty. Nevertheless, with sales struggling and the absence of a concrete utility for the token, this valuation remains largely theoretical.
An Uncertain Future for World Liberty Financial
World Liberty Financial still lacks clarity about its goals. The website presents the project as a gateway to crypto investment opportunities, with mentions of a future lending and borrowing service. Additionally, reports suggest that the company is considering launching a stablecoin, but these initiatives remain vague. For now, the challenges of achieving its new fundraising goal highlight the difficulties that World Liberty Financial faces in establishing itself in an increasingly demanding market.
