Trump Family's WLFI Token Drops 25% on Supply Surprise

The WLFI token, launched by the Trump family, experienced a significant drop in value shortly after its debut on the market. The token, which was initially priced at a certain value, saw a 25% decrease in its trading price, resulting in a market capitalization of approximately 54 billion dollars. This decline was largely attributed to the unexpected revelation that the circulating supply of tokens was far greater than initially anticipated by investors.

In the final hours before the token's release, World Liberty Financial Inc. announced that 25 billion tokens would be entering circulation, a figure that was five times higher than the 5 billion tokens that investors had expected. This sudden increase in the circulating supply raised concerns among investors and led to a loss of confidence in the project. The company, co-founded by Eric Trump and Donald Trump Jr., with Donald Trump serving as an honorary co-founder, directly or indirectly controls over 200 billion WLFI tokens, according to information provided on the project's website.

In an effort to stabilize the market, World Liberty Financial implemented a token-burning mechanism, removing 47 million tokens from circulation, valued at approximately 11 million dollars. However, analysts have pointed out that the true test for the WLFI project lies in whether the World Liberty ecosystem can establish itself beyond speculative trading.

Investors expressed strong dissatisfaction with the sudden change in the circulating supply of WLFI tokens. On the World Liberty governance forum, multiple investors questioned the data changes and the ambiguity surrounding the qualification of "early supporters." It was disclosed that out of the total supply of 100 billion tokens, the majority remain non-tradable and are primarily held by insiders. Several billion tokens are set to be allocated to Alt5 Sigma Corp., a publicly traded cryptocurrency payment company with close ties to several key figures within World Liberty. Alt5 recently agreed to hold approximately 7.5% of the total WLFI supply and raised 1.5 billion dollars in funding.

The estimated circulating supply, which ranged from 3% to 25%, contributed to market confusion in the hours following the release. The founder of AirdropAlert.com, Morten Christensen, commented, "Ideally, the first day should have been strong. Unfortunately, the team's communication errors before the release and the negative sentiment on social media platform X turned the first day into a red one (indicating a decline)."

In response to the market volatility, World Liberty Financial took several measures to stabilize investor sentiment. In addition to the 47 million tokens that were already destroyed, the team proposed destroying some of the WLFI tokens received as fees to further reduce the circulating supply. This proposal has gained widespread support but has not yet been formally voted on by WLFI holders. Despite the poor performance on the first day of trading, a spokesperson for World Liberty Financial stated, "The release of WLFI has been a tremendous success."

The sons of Trump, Eric Trump and Donald Trump Jr., celebrated the launch of WLFI on social media platforms on Monday. Eric Trump highlighted that the trading price of WLFI was significantly higher than the price during the early rounds, citing this as evidence of strong performance. Additionally, the sharp decline in Alt5 Sigma's stock price underscored the close relationship between the company and the WLFI token. On Tuesday, Alt5's stock price fell by 29%, and on Wednesday, it dropped by nearly 20%, reflecting the growing concern in the traditional stock market about WLFI's performance.

Despite the fact that Alt5 Sigma's tokens are tradable, the company has stated that its goal is to accumulate rather than sell them, further emphasizing the interdependence between the company and WLFI. Analysts believe that the true test for the WLFI project lies in whether the World Liberty ecosystem can establish itself beyond speculative trading. The project's stablecoin, USD1, already has a market capitalization of approximately 2.7 billion dollars, and the team plans to introduce lending and other services.

A senior analyst at Kaiko, Dessislava Aubert, noted, "Volatility on the day of release is quite common. The recently proposed fee-burning mechanism may generate short-term hype. However, long-term value depends on the adoption of the ecosystem, particularly the promotion of WLFI usage through USD1, despite facing fierce competition in the stablecoin market on major centralized exchanges." Lex Sokolin, a venture capitalist at Generative Ventures, pointed out that, given WLFI's fully diluted valuation of over 200 billion dollars, it has received more favorable treatment compared to other similar cryptocurrency projects. "Compared to these peer projects, WLFI has so far been received very favorably by the market," he said.

An early holder, Bruno Ver, who initially planned to sell quickly, decided to wait and see, stating, "I am not worried at the moment; I am just curious about how the market will react and evolve in the long term."