Crypto tokens from a new decentralized finance (DeFi) protocol World Liberty Financial (WLFI) were on sale yesterday, October 15, backed by former US President and current presidential candidate Donald Trump. However, technical faults resulted in website outages, preventing it from hitting the $5 million in sales within the first-hour mark.
The WLFI token was kicked off with a goal of raising $300 million but inconsistent transaction processing led to a rocky start, casting doubt on the project’s credibility. Some analysts and traders were questioning if the system was ready for mainstream adoption.
The WLFI token sale, initially restricted to whitelisted investors, commenced with an X Spaces broadcast notably lacking Trump's presence. This absence, coupled with the technical glitches, has fueled doubts within the crypto community regarding the project's legitimacy and long-term viability.
Data from blockchain analytics firm Chainalysis highlighted gaps in the token availability which led to transaction processing issues. "We've observed irregular patterns in the WLFI token transactions, indicating potential backend problems or liquidity constraints," said Maria Gonzalez, a senior analyst at Chainalysis.
Many crypto experts like the Chief Legal Officer of Variant Fund Jake Chervinsky criticized the timing of the WLFI token launch saying “The launch of a politically-affiliated token so close to a major election raises serious regulatory concerns. The SEC will likely scrutinize this project closely."
Meanwhile, the Co-Founder of Money On Chain, Manuel Ferrari, said "The vast majority of people who will buy into Trump's DeFi project would be better served simply buying Bitcoin and holding." These concerns echo the mood across the crypto world where investors are weary of celebrity-endorsed digital assets. Although the WLFI token sale is claimed to be targeting accredited investors only, people are sceptical about it.
The U.S. Securities and Exchange Commission (SEC) defines accredited investors as those with a net worth exceeding $1 million or an annual income of over $200,000. However, the project's apparent difficulty in managing sales to this exclusive group has raised eyebrows among financial experts.
The WLFI website remains inaccessible although sporadic new transactions are happening. The coming days will be crucial in determining whether World Liberty Financial can overcome its initial hurdles and establish itself as a credible player in the increasingly crowded DeFi landscape.