WLFI rises 3.50% in 24 hours, the intense clash between policy dividends and governance risks

WLFI today reports $0.17, up 3.50% within 24 hours, with a high of $0.19 and a market cap of approximately $4.509 billion. Behind this surge are substantial progress in project fundamentals as well as deep market concerns over governance disputes and valuation. The seemingly moderate increase reflects a delicate balance between policy expectations and risk factors.

Drivers of the Price Increase: Dual Engines of Policy Support and Business Progress

The upcoming Lake Tahoe Forum sends strong signals

World Liberty Financial is scheduled to hold its first “World Liberty Forum” at Lake Tahoe on February 18. The lineup of attendees is quite impressive. According to the latest news, participants include Goldman Sachs Chairman and CEO David Solomon, Franklin D. Roosevelt Chief Executive Officer Jenny Johnson, CFTC Chairman Michael Selig, FIFA President Gianni Infantino, and core project founders. The forum is expected to host about 300 participants from business, investment, and policy sectors, focusing on key topics such as financial market evolution, digital assets, and artificial intelligence.

The significance of this forum lies in not only showcasing institutional and policy recognition for the project but also in the market’s expectation that “breakthrough announcements” will be made during the event. Such expectations often provide price support before the actual release.

Progress on Banking License Application and Stablecoin Commercialization

According to the latest information, World Liberty Trust Co. submitted a banking license application to relevant U.S. authorities on January 5. If approved, this entity will be able to exercise banking functions in specific ways and directly issue USD1 stablecoins. This marks a critical step in the project’s transition from a crypto financial tool to compliant payment infrastructure.

Meanwhile, Pakistan has reached a cooperation agreement with related institutions of World Liberty to explore launching a USD-linked stablecoin for cross-border payments and compliant digital payment systems. This signifies that USD1 has received support at the sovereign level for the first time, opening new avenues for the project’s international expansion.

Market Controversies and Risk Factors: Hidden Dangers Cannot Be Ignored

Governance Structure Issues Spark Community Opposition

Despite policy and business progress, WLFI’s recent governance voting has triggered widespread community doubts. On-chain data analysis shows that the first nine wallets control about 59% of voting rights, with the largest single wallet contributing 18.786%. Many of these key votes come from team or strategic partner-related addresses, while a large number of locked ordinary holders are excluded from voting.

Even more concerning is the income distribution mechanism. According to project documents, 75% of net protocol income is allocated to entities related to the Trump family, and 25% to entities related to the Witkoff family. WLFI holders do not directly share in protocol income. This severely limits the rights of ordinary investors.

Whale Short Selling and Valuation Skepticism

On January 20, a large whale address opened a 5x leveraged short position on WLFI, with a position size of about $1.316 million, currently with a floating profit of 7.56%. More notably, well-known whale DefiSquared publicly questioned WLFI’s valuation. He pointed out that WLFI’s fully diluted market cap (FDV) reaches $16 billion, but protocol revenue and organic user activity are minimal. Compared to normal DeFi protocols like Aave and MakerDAO, the premium is as high as 10 to 20 times.

DefiSquared also emphasized that, despite the apparent total value locked (TVL) exceeding $3 billion, the vast majority of funds come from a single entity. Such skepticism reflects deep market concerns about the authenticity of the project’s fundamentals.

Technical Performance and Market Sentiment

Recent technical analysis indicates mixed market sentiment toward WLFI. Several traders note that WLFI has formed a typical “breakdown and retest” pattern on the 4-hour chart, suggesting that bearish forces remain dominant. Meanwhile, the moving average system shows EMA20 below MA20, with overall resistance from EMA60/MA60, implying limited rebound potential.

On the other hand, 24-hour trading volume reached $227 million, a 180.67% change from the previous day, indicating increasing market participation. This suggests growing market attention despite divergent directions.

Future Outlook: Can Policy Bonuses Offset Fundamental Concerns?

Based on current information, WLFI has several key catalysts in the next 3-6 months. The Lake Tahoe Forum on February 18, progress in banking license approval, and the international application of USD1 stablecoin could all be pivotal events driving the price.

However, the question remains whether these catalysts can truly improve the project’s fundamentals. If the forum merely releases marketing announcements rather than substantial revenue or user growth, market enthusiasm may be hard to sustain. The approval process for banking licenses typically takes time and may not materialize in the short term. Similarly, the application of USD1 in Pakistan will require time to verify its effectiveness.

From a valuation perspective, a FDV of $16 billion appears inflated relative to the project’s current revenue and user base. If policy benefits fade and fundamentals do not catch up, the risk of correction should not be underestimated.

Summary

WLFI’s 3.50% increase reflects market recognition of policy support and business progress, but this confidence is built on highly uncertain foundations. The Lake Tahoe Forum, banking license application, and other events are indeed points of interest, but governance disputes, valuation concerns, and short-selling pressures continue to exert counterbalance.

For investors, the key is to distinguish between “policy expectations” and “fundamental realization.” In the short term, policy benefits and event anticipation may continue to support prices, but medium-term trends ultimately depend on whether the project can achieve real commercialization and user growth. Improving governance structures and increasing transparency in income distribution are also critical issues to watch.