World Liberty repays $25M after WLFI token plunge

World Liberty Financial repaid $25 million of a loan on the Dolomite lending protocol after its WLFI token dropped to a record low of $0.07967. The project posted a $15 million payment on April 7 and a $10 million payment on April 10 to reduce pressure on the protocol.

On-chain analytics show World Liberty had supplied about $406 million worth of WLFI across two wallets as collateral to borrow $150 million in USDC. Those holdings represented roughly 5% of the token’s total supply and nearly the full WLFI cap available on Dolomite. The heavy use of WLFI as collateral coincided with the token’s weakest price since the project’s 2025 rollout.

The borrowing activity drained Dolomite’s USD1 lending pool and pushed utilization rates above 93%, creating withdrawal delays for retail depositors. WLFI used as collateral now accounts for about 55% of Dolomite’s reported $835.7 million in total value locked, increasing the protocol’s exposure to a single, depreciating asset.

The situation drew attention to overlapping ties between the platforms. Dolomite co-founder Corey Caplan serves as an advisor to World Liberty, a connection that critics flagged when scrutiny intensified.

World Liberty rejected insolvency concerns as “FUD” in social updates and described its borrowing as support for broader liquidity and yields on the platform. The developers wrote: “We are one of the largest suppliers and borrowers on WLFI Markets. Yes, we supplied WLFI as collateral and borrowed stablecoins. No, we are nowhere near liquidation — and frankly, even if markets moved dramatically against us, we’d simply supply more collateral. That’s not a risk. That’s how this works.”

To address retail holders facing restricted tokens, World Liberty said it will propose a governance plan to unlock those holdings through a phased, long-term vesting schedule. The team framed the proposal as a predictable release timeline aimed at easing selling pressure.

Market participants and protocol operators will monitor whether the recent repayments, the proposed token-unlock plan and any additional collateral postings are enough to stabilize WLFI and restore liquidity to Dolomite’s lending pools.