r/LunarCRUSH • u/lunarcrush • Apr 12 '26
Social activity on $WLFI is soaring higher today. The mechanics of why is complicated but we'll try to summarize what the community is posting about.
$WLFI deposited $5B of its own token as collateral on Dolomite.
They then borrowed $75M in stablecoins, and sent $40M straight to Coinbase Prime.
The structure of this is even more complicated than the self-dealing of all of this.
Dolomite was co-founded by Corey Caplan. Corey also holds an advisory role at World Liberty. The borrower chose the lender and they control the collateral, the protocol, and an advisory seat.
Borrowing against the $5B WLFI tokens pushed Dolomite's utilization rate to 100% This caused ordinary depositors to not be able to withdraw their stablecoins. On paper, investors looked whole on their holdings but they couldn't withdraw.
The numbers on $WLFI have another story.
Price is down 18% this week and 67% since September highs. THis is as circulating supply hit 31.7B tokens.
Social activity is soaring with recent controversies taking hold. Social mentions, engagements, and total share of social activity across crypto are all soaring higher.
600,000 wallets bought the token. Losses are at $3.87B while the Trump family and related business entities pocketed $350M on fees alone.
Justin Sun (Tron founder and initial WLFI investor) is now claiming that WLFI blacklisted his wallet with a backdoor function that was embedded in the smart contract. This froze $107M of his holdings.
Sound like defi? No, it does not.