Trump-backed World Liberty Financial taps Aave lenders in $7.5m DeFi play

World Liberty Financial, the Trump family’s purported DeFi project, borrowed $7.5 million worth of Tether’s USDT stablecoin from DeFi lender Aave on Monday.

It is using the funds to boost its USD1 stablecoin.

Onchain records show the project deposited $52 million worth of Wrapped Ethereum, Wrapped Bitcoin, and Lido staked Ethereum tokens with Aave as collateral to borrow the USDT.

WLF sent the borrowed funds to BitGo, the firm that custodies the funds backing USD1, and received back an equal amount of USD1.

World Liberty Financial now holds $13.5 million worth of USD1.

Stablecoin deposit

It’s the biggest DeFi play World Liberty Financial has made since launching last October.

The project deposited $5 million worth of Circle’s USDC stablecoin to Aave in February.

World Liberty Financial is a planned DeFi protocol built on top of Ethereum and its smart-contract network.

It isn’t owned by President Donald Trump or his family, but Trump and his three sons, Eric, Donald Jr, and Barron, take an active role in promoting and developing the venture and are set to receive a share of its profits.

Yet aside from using the same code as Aave, there have been few details about the primary World Liberty Financial business.

In April, the project launched USD1, a dollar-pegged stablecoin backed by short-term US government treasuries, US dollar deposits, and other cash equivalents.

The stablecoin grew quickly on its launch and became the seventh-largest with almost $2.2 billion worth in circulation.

Slow growth

That growth has slowed significantly, with USD1’s circulating supply increasing just $60 million since.

Stablecoins have soared in popularity in recent months, hitting a total market value of $250 billion, per DefiLlama data.

Proponents say stablecoins offer significant advantages in speed and efficiency over traditional payments systems. Fintech firms, banks, and even payments giant Visa are all experimenting with their own stablecoins.

World Liberty Financial’s stablecoin is designed to compete with market leaders Tether and Circle by gearing itself more toward institutions.

Sovereign investors

“We’re offering a digital dollar stablecoin that sovereign investors and major institutions can confidently integrate into their strategies for seamless, secure cross-border transactions,” World Liberty Financial co-founder Zak Folkman said in a March blog post.

Yet it’s not clear if institutions are interested.

Many prefer more established stablecoins from market leaders Tether and Circle, while others, such as asset manager BlackRock, have developed their own stablecoins.

Still, World Liberty Financial is trying hard to drum up interest.

On June 2, World Liberty Financial announced a four-week campaign to drive USD1 adoption on BNB Chain.

Two days later, World Liberty Financial airdropped over $4 million worth of USD1 tokens to 85,000 wallets that had previously participated in the sale of the project’s WLFI governance token.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.