ALT5 Deal Sets First $0.20 Valuation for Trump-Backed WLFI Token

ALT5 Sigma Corporation has entered into a significant agreement with World Liberty Financial (WLF), marking the first valuation of the Trump-backed decentralized finance (DeFi) token WLFI at $0.20 per unit. This development comes as ALT5 announces its strategic pivot to operate as a crypto treasury company, selling 200,000 new shares to raise capital for the purchase of $1.5 billion worth of WLFI [1].

According to ALT5’s chief investment officer, Matt Morgan, half of the newly issued shares will be directly swapped for WLFI held by World Liberty Financial [1]. While the company has not confirmed broader participation from other WLFI holders, it did disclose the involvement of several institutional investors and venture capital firms in the share sale [1]. This marks the first time the WLFI token has been assigned a market value since its initial sale last year, during which $550 million worth of tokens were issued to investors [1].

Pricing during the initial token offering varied depending on the timing of purchases. Among the notable participants was Tron founder Justin Sun, who acquired $75 million worth of WLFI [1]. Initially, the token was non-tradable, making it impossible to assign an open-market valuation [1]. The recent valuation of $0.20 per WLFI token highlights the increasing interest in tokenized assets and the evolving landscape of crypto treasury models, where public companies raise capital to invest in digital assets [1].

This strategy has been pioneered by MicroStrategy CEO Michael Saylor, whose decision in 2020 to purchase Bitcoin using debt and equity financing led to a more than 3,500% increase in the company’s stock value [1]. The favorable U.S. crypto policies under the Trump administration have encouraged similar strategies, with many companies forming through reverse mergers with struggling public firms [1].

ALT5’s transition is not without potential conflicts of interest. The company has added World Liberty Financial CEO Zach Witkoff, COO Zak Folkman, and Eric Trump to its board. All three individuals hold WLFI tokens and stand to benefit from the token’s appreciation [1]. Institutional investors have raised concerns about governance structures in such arrangements. Additionally, SEC filings by ALT5 confirm the purchase of WLFI at $0.20 per token, highlighting the significance of this valuation [1].

The WLFI token, while functioning as a governance asset for World Liberty Financial, does not operate as a decentralized autonomous organization (DAO). Holders are granted voting rights on protocol changes. In July, WLFI holders voted to make the token tradable, with trading expected to begin by the end of August [1].

If the $1.5 billion fundraising initiative is completed, it will represent a major expansion of the Trump family’s influence in the digital asset sector. Notably, the crypto industry has already contributed over $26 million to Donald Trump this year, according to campaign finance filings [1]. Contributions to the pro-Trump super PAC, MAGA Inc., have also come from some of the most prominent names in the crypto space [1].

This deal and the broader trend of crypto treasury companies reflect the growing convergence of traditional finance and digital assets. However, the involvement of high-profile political figures and the presence of potential conflicts of interest highlight the need for continued regulatory scrutiny and market transparency.

Sources:

[1] https://cryptonews.com/news/alt5-deal-puts-first-valuation-on-trump-backed-wlfi-token-at-0-20/