WLFI borrows $50.44 million in stablecoins; the treasury runs out, causing DeFi liquidity to turn negative

Gate News message: World Liberty Financial (WLFI) has, on its lending platform Dolomite, borrowed more than 50 million US dollars worth of $1 stablecoins in just five days, drawing widespread attention across the DeFi market. On-chain data shows that WLFI’s treasury moved in about 3 billion WLFI governance tokens as collateral, borrowed $50.44 million in stablecoins, causing Dolomite’s fund pool utilization rate to exceed 100%, with only 232k tokens of remaining liquidity and the supply of $1 stablecoins nearly exhausted.

This move pushed deposit interest rates in the lending market up to 35.81%, with borrowing costs reaching 30%, indicating that the behavior of a single internal entity directly created on-chain scarcity. Since January 2026, WLFI, through a partnership with Dolomite, has launched World Liberty Markets. Its USD1 dollar-pegged stablecoin is supported by US Treasuries and cash equivalents, with a market cap of about $3.5 billion. Analysts believe this operation may be driven by internal liquidity needs or by artificially boosting on-chain activity and total value locked (TVL).

Currently, WLFI collateral makes up more than half of Dolomite’s TVL in that market. Analysts warn that high-yield lenders may not be able to withdraw funds in a timely manner until the large borrowing positions are liquidated; otherwise, liquidation risk could spill over and affect the entire liquidity pool. The community has compared this situation to a pattern seen in past DeFi cycles, where chasing high yields led to liquidity crises.

Even though the high interest rates are real, they reflect artificially created market scarcity rather than natural supply and demand. Investors and lending participants should closely monitor Dolomite’s real-time liquidity pool data and carefully assess risks to prevent chain-reaction liquidations triggered by WLFI token price volatility.