DOLO Surges Over 30% Following WLFI's Lending Market Announcement

World Liberty Financial's (WLFI) recent announcement of its strategy to support USD1 stablecoin growth has driven a significant market response. Digital Optionality (DOLO) surged over 30% following the development, highlighting the growing interest in the cryptocurrency lending sector.

The announcement came as Senate committees prepare to markup a proposed crypto market structure bill. The bill, known as the Digital Asset Market Clarity Act of 2025, aims to clarify the roles of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) in regulating digital commodities according to reports.

The U.S. Senate Banking and Agriculture Committees will hold separate markup sessions to revise the bill's details, which were delayed last year due to a government shutdown. The legislation defines digital commodities and outlines regulatory standards for crypto market participants. The bipartisan effort is seen as a key step toward clarifying the market's structure and fostering innovation.

Why Did This Happen?

The WLFI-led initiative to incentivize USD1 adoption is part of a broader effort to expand the stablecoin's presence across centralized and decentralized finance (CeFi and DeFi) platforms. The proposal passed with 77.75% approval and authorizes the use of up to 5% of WLFI's treasury for the initiative.

The USD1 stablecoin has already reached nearly $3 billion in total value locked within six months. The incentive plan aims to sustain and expand this figure, ensuring USD1 remains competitive in a crowded stablecoin market.

WLFI's price has surged in recent weeks, gaining nearly 20% weekly. The rally coincided with statements from Donald Trump regarding military operations in Venezuela and plans for a token issuance by Trump Media and Technology Group.

How Did Markets React?

The surge in DOLO has been attributed to broader DeFi activity and investor optimism surrounding lending protocols. In parallel, a new DeFi project, Mutuum Finance (MUTM), raised $19.7 million and moved into its second roadmap phase. The protocol focuses on on-chain lending and borrowing markets, aiming to offer both pooled and direct lending options.

Coinbase has also voiced concerns about the market structure bill, particularly around restrictions on stablecoin rewards. The exchange may reconsider its support if the bill imposes broader limits on rewards for stablecoin holders.

The debate over stablecoin regulation has intensified as lawmakers attempt to balance innovation with financial stability. Banking groups argue that crypto platforms lack the safeguards of traditional financial institutions, while crypto firms emphasize the importance of competition and user incentives according to analysis.

ALT5 Sigma reported strong Q3 2025 results, with net income reaching $57 million and stockholders' equity rising to $1.6 billion. The company also announced a $WLFI treasury strategy, holding approximately 7.28 billion WLFI tokens.

What Are Analysts Watching Next?

Market participants are closely watching the outcome of the Senate markup sessions, which are scheduled for Thursday. The revised bill is expected to address key issues, including DeFi regulation, stablecoin reserves, and token issuance authority.

Analysts are also monitoring the impact of stablecoin regulations on major crypto exchanges like Coinbase. The firm's stablecoin-related revenue is projected to reach $1.3 billion in 2025, and further restrictions could significantly affect its business model.

The broader DeFi space continues to attract capital, with projects like Mutuum Finance showing strong progress in their development roadmaps. The ability to scale and integrate with major blockchain platforms will be a key factor in their long-term success according to reports.

As the U.S. government works to finalize its crypto policy framework, the interplay between regulatory clarity and market innovation will shape the sector's trajectory in the coming months. Investors are advised to monitor developments in both regulatory and market environments for potential investment opportunities according to analysis.