Gm Fintech Architects —
Welcome back from the summer. Our industry has taken no breaks and is firing on all cylinders. Best we can do is hang on!
Today we are diving into the following topics:
Summary: We explore World Liberty Financial (WLFI), a Trump-aligned crypto project. Its primary product, the USD1 stablecoin, has $3B in circulating supply, mostly on BNB Chain. Despite this, WLFI’s token is valued at $20B — over 6x its stablecoin supply — illustrating the speculative focus where the token is the product. The project has also launched a Digital Asset Treasury (DAT) via a public equity shell (NASDAQ: ALTS), offloading $1.3B of WLFI tokens into public markets to remove selling pressure.
Topics: WLFI, USD1, $TRUMP, $MELANIA, Circle, USDC, Tether, USDT, ALTS, MicroStrategy, Bitmine, Sharplink, Solana, Hyperliquid, Ethena, BNB, Sushi, Kelsier Ventures
To support this writing and access our full archive of newsletters, analyses, and guides to building in the Fintech & DeFi industries, see subscription options below.
Our Ecosystem: AI Venture Fund | AI Research | Lex Linkedin & Twitter | Sponsors
Long Take
Liberated
Meet World Liberty Financial, a company with deep Trump family backing.
The United States is in its crypto ascendance thanks to the current political climate. Had the Democrats not alienated the tech and finance sectors, perhaps things would be different. We have swung entirely to the pro-libertarian extreme — soon traditional equity exchanges will offer crypto direct to their customers, and banks can custody and transact in stablecoins.
However, this is not free. There is a tax, a tariff, a tithe to the machine.
The first price of doing business was what happened to the $TRUMP and $MELANIA meme coins launched on Solana. These assets did not have a business behind them, and like most celebrity coins, were heavily market-manipulated up and down by third parties. Famously, the Argentinian $LIBRA followed the same playbook, but its naked destruction of value exposed the criminals behind a number of these schemes — Kelsier Ventures. It also showed just how zero-sum and short-term the market had become, leading to a crash and a gradual abandoning of Solana’s meme factories.
There is still $8B of FDV juice in the meme coin on a $1.7B of marketcap. That means unvested holders will slowly sell into the existing volume over time — a structural practice that leads to poor market dynamics, and is present in nearly all crypto VC investments. Melania’s asset is down more drastically to a $200MM FDV.
This is what you would expect with non-operating coins, they are pure sentiment. But what about an operating business or protocol, like Circle or Aave? DeFi is a profound innovation and can be highly revenue-generating.
World Scale
World Liberty Financial (WLFI) is a wrapper for onchain finance products.
Entrepreneurs focus on getting adoption in the products, and thereafter worry about equity and token value. Financial engineers focus on getting the token and equity to be valuable first, and thereafter worry about funding adoption. The former make money slowly but consistently, while the latter make money quickly and then dissipate.
Examples of meaningful business models are:
💸 Money in motion
Trading via exchange (e.g., Uniswap, Hyperliquid)
Paying for commerce (e.g., Bridge/Stripe)
Market making (e.g., Wintermute)
💰 Money at rest
Issuing stablecoins (e.g., Circle USDC)
Staking assets for yield, effectively fixed income (e.g., Lido)
Asset management or “RWAs” (e.g., BlackRock, Centrifuge)
📉 Money at risk
Liquid Lending (e.g., Aave)
Private Lending (e.g., Maple)
Insurance Underwriting (e.g., Nexus Mutual)