Trump DeFi project’s token sale bombs harder than Joker sequel

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Donald Trump’s first-ever token sale proved a major bust while opponent Kamala Harris is trying to sell her ‘crypto’ advocacy to black voters ahead of November’s U.S. presidential election.

October 15 brought the initial token sale of the Trump-aligned World Liberty Financial (WLF) decentralized finance (DeFi) project. The day before, the WLF team conducted an ‘X’ Spaces event in which they claimed that more than 100,000 accredited (aka deep-pocketed) investors had been ‘whitelisted’ to participate in the sale of the WLFI ‘governance’ token.

Trump himself pimped the token sale via his personal X account over the weekend, calling it “YOUR chance to help shape the future of finance.” Possibly, but it’s primarily YOUR chance to help shape the future of Donald’s finances, given the generous allocation of WLFI tokens his family is slated to control.

But on the big day, the WLF website repeatedly crashed once the sale got underway, finally appearing to crash for good about an hour into the process. By that point, around 2,900 individual wallets had purchased over 330 million WLFI at a rate of 1.5¢ per token for a total haul of around $5.5 million worth of ETH, USDT and USDC.

As the outage dragged on, the WLF official X account failed to offer a single word of explanation as to what happened, what they were doing to remedy it, or when the sale might resume. Equally silent were the X accounts of the Trump offspring—sons Don Jr., Eric and Barron—whose photos are on the WLF executive roster as ‘Web3 Ambassadors.’

The site finally came back online by mid-afternoon, but by 10pm EST, the total number of tokens sold was under 700 million, leaving just under 19.3 billion tokens unclaimed. The total dollar value raised was only around $10 million, a tiny sliver of the $300 million the WLF hype machine claimed it expected to raise.

The poor showing appears to have finally shocked the Trumps out of their lethargy, as Donald’s X account posted a video on Tuesday evening urging people to “Get your $WLFI tokens now.” The full court grift followed with Don Jr. saying “LETS GO!!!” while Eric chimed in with “Everyone ready!?” Evidently not.

Coming just three weeks before November’s vote, the token sale gave off two very distinct vibes. First, that Donald is worried that he might lose this nailbiter, so he’s grifting like there’s (literally) no tomorrow. Second, it was intended as a way for foreign interests to funnel cash to Donald’s campaign in violation of campaign finance rules and curry some favor with the potential next leader of the formerly free world.

The WLF website notes that “Donald J. Trump and his family members … will be entitled to receive significant fees for services provided to World Liberty Financial, which amount cannot yet be determined.” Also to be determined: exactly what—if anything—the Trumps have to do to receive these ‘significant fees’ beyond pimp the project to the same rubes who bought all the other Trump-branded kitsch (sneakers, watches, Bibles, his multiple series of non-fungible tokens (NFTs), etc.).

Speaking of, Gizmodo recently reported that scammers are flocking to Trump’s Truth Social platform because the site “seems to be a target-rich environment for people who are easy to con.” Ahem.

The ‘this is fine’ print

The WLF team’s other big Monday announcement was the appointment of Paxos co-founder Rich Teo as head of WLF’s stablecoin operations, whatever they are, because WLF still won’t definitively state what their project actually does. We’re a couple months into this thing and we’re still no clearer on what this transmogrifying wonder-box is supposed to do beyond disappoint.

WLF’s ‘Gold Paper’—like a white paper but thematically gilded—states that WLF’s ‘mission’ is to “democratize access to financial opportunities while fortifying the global status of the US Dollar.” This will be accomplished by “supporting US dollar-based stablecoins and DeFi applications that seek to preserve the US Dollar’s status.”

However, WLF’s primary purpose appears to be little more than serving as an educational hub providing users with “information about and access to certain third-party DeFi applications.” This dovetails with the WLF-affiliated trademark applications that were filed this summer, two of which were based on “providing financial information” in the fields of ‘cryptocurrency’ and ‘DeFi.’

It certainly sounds like WLF will happily promote other operators’ DeFi platforms while conveniently disavowing any legal responsibility for whatever happens next. So, basically, the Trump University boondoggle with even less accountability. Will they take a cut of the proceeds derived from these third-party transactions? Is WLF simply a glorified affiliate marketing site?

There is currently a “temperature check proposal to launch an Aave V3 instance for WLF.” The proposal for accessing the Ethereum-based Aave’s decentralized non-custodial liquidity protocol would allow WLF users to deposit USDC, USDT, ETH and WBTC, which would serve as collateral to borrow similar assets.

But with the token sale a bust and Trump’s historic aversion to anything remotely related to the word ‘loser,’ how much longer might Trump want to be publicly associated with WLF?

There is one obvious reason for Trump sticking with WLF. The Gold Paper also revealed that DT Marks DEFI LLC, “agreed to use reasonable efforts to request the owners and principals of DT Marks DEFI LLC, including Donald Trump, to promote the WLF and the WLF Protocol from time to time.” So Trump doesn’t have to do anything, merely entertain ‘requests’ to shill for WLF now and then.

Trump will also allow WLF to use his name and AI-generated-none-more-manly illustrations of himself in their promotional material. In exchange, “DT Marks DEFI LLC will receive 22.5 billion $WLFI tokens and a right to receive 75% of the net protocol revenues as defined in the services agreement after deduction of agreed operating expenses and the initial treasury reserve.”

Harris bets on black

Meanwhile, Trump’s opponent, Kamala Harris, made her most explicit crypto policy pledge to date in an October 14th document detailing her campaign’s efforts to shore up voting support among black males. Titled Vice President Harris Will Deliver for Black Men, the document lays out a five-point ‘opportunity agenda’ that includes: “Supporting a regulatory framework for cryptocurrency and other digital assets so Black men who invest in and own these assets are protected.”

The document expands on this point thusly: “More than 20% of Black Americans own or have owned cryptocurrency assets. Vice President Harris appreciates the ways in which new technologies can broaden access to banking and financial services. She will make sure owners of and investors in digital assets benefit from a regulatory framework so that Black men and others who participate in this market are protected.”

Critics have pointed out that this language is open to interpretation regarding how strict or lenient any Harris-dictated regulatory framework might prove. And in a subsequent speech focused on this ‘Black men’ agenda, Harris offered no further details on her digital asset policies. In fact, she didn’t so much as reference digital assets by name.

Speaking on Monday’s WLF Spaces event, the reliably animated Don Jr. referenced Harris having allegedly “adopted this pro-crypto policy.” But Junior said he “hopes everyone understands that that’s going to be a lie like everything else … The Crypto Bros and Crypto Girls gotta get out there and understand exactly what’s going on.” Sure, Junior… Hey, maybe you should start an educational website to get this message across?

It matters little

On October 14, Galaxy Research, an offshoot of Mike Novogratz’s Galaxy Digital (NASDAQ: BRPHF) financial services firm, released a ‘policy scorecard’ detailing how Trump, Harris and current U.S. President Joe Biden differ on various issues affecting the digital asset sector.

We’ll spare you the eyestrain of reading some extremely tiny type by condensing the findings into eight words: Harris better than Biden, Trump better than Harris. Oh, and while there’s “limited” downside risk to a Harris victory, there’s an “explosive upside possible” if Trump gets a second term. (We don’t think that phrase refers to projectile vomiting, but who’s to say?)

Wall Street analysts have their own views, with Bernstein issuing a note this week saying recent spikes in the fiat value of prominent tokens reflect market sentiment that Trump may get a second term. Last week, JPMorgan (NASDAQ: JPM) analysts suggested a Trump win may already be priced in, although a brief spate of irrational exuberance will undoubtedly send BTC soaring should Trump manage a victory that doesn’t require angry mobs storming the Capitol.

It’s not a lie if you believe it

Meanwhile, the battle to control this race’s narrative shows no sign of letting up. Trump has seen his odds of victory surge on the PolyMarket prediction betting site since the month began, going from a dead heat to Trump holding a commanding 58-42 lead as of October 15.

But as previously noted, Trump’s PolyMarket rise appears to be based on one deep-pocketed bettor throwing their financial weight behind the GOP candidate. ‘Fredi9999’ had already acquired roughly seven million shares by early last week, but this number has since more than doubled to over 15 million and is increasing by the hour.

Since Fredi9999 has also acquired millions of shares in markets that Trump is unlikely to win—like the popular vote, something Trump failed to do in both his previous attempts—it suggests Fredi9999 is more interested in maintaining the public perception that Trump is in the lead, rather than reflect any deep-seated belief.

It’s worth noting that Fredi9999 has been wrong before, like when he acquired over 14 million shares on a bet that Florida Gov. Ron Desantis would win the 2024 Presidential election. Not for nothing, but Trump’s new bestest buddy Elon Musk was a Desantis supporter during the GOP presidential primary campaign.

Musk declared earlier this month that prediction markets are “more accurate than polls, as actual money is on the line.” Musk, the richest man in the world, appears keen to convince the wider public—including poll-obsessed media outlets—that news of Trump’s PolyMarket surge should be echoed far and wide. Draw your own conclusions.

Congress ain’t done yet

Finally, Congressional crypto supporters still haven’t given up on passing some kind of digital asset legislation in the lame-duck session that follows November’s vote. Last week, Sen. Bill Hagerty (R-TN) released a ‘discussion draft’ of legislation intended to establish “a clear regulatory framework for the regulation and supervision of stablecoin issuers.”

In a statement, Hagerty acknowledged that his draft “builds upon the Clarity for Payment Stablecoins Act” sponsored by Rep. Patrick McHenry (R-NC) in the House of Representatives. That bill was approved by the House Financial Services Committee but has yet to come up for a floor vote. Hagerty’s bill would compete with the Lummis-Gillibrand Payment Stablecoin Act of 2024, which debuted in the Senate this spring but failed to make it out of committee.

In a Financial Services Committee hearing last month, Rep. Maxine Waters (D-CA) called for a “grand bargain” on stablecoin legislation. Waters, who helped McHenry tinker with the House bill, stated that she hoped to strike such a bargain before the year was through despite several unresolved issues—including who would have oversight of stablecoin issuers: the federal government or state-level regulators.

The Lummis-Gillibrand bill required state-regulated stablecoin issuers to begin a ‘transition’ to federal oversight once their coin’s market cap passes $9 billion and to complete that transition once the cap passes $10 billion.

Hagerty’s bill claims to “strengthen the state pathway to stablecoin issuance” via a clause that allows an issuer whose market cap exceeds $10 billion to ask for a federal waiver “to remain under a State-level regulatory regime,” with these waivers subject to annual renewal by the Fed.

While hope springs eternal, Rep. John Curtis (R-UT) warned last week that bipartisan support for crypto legislation remains “very fragile.” Trump has attempted to claim the mantle of ‘crypto president,’ but Curtis said that if ‘crypto’ “becomes a partisan issue, we will have a very, very difficult time” approving any digital asset legislation.

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