Innovative Attempts on Government Bond Stablecoins and Governance Tokens

A new type of stablecoin is about to be launched, backed by US Treasury bonds, and it features a unique governance token mechanism. This project has a political background, and the initial circulation of its governance token WLFI is only 5%.

On September 1st, World Liberty Financial will launch its governance token WLFI. This is seen by some as a significant innovation in the value capture model of stablecoins, while others are skeptical about it. However, despite the concerns surrounding its governance token and launch mechanism, this could very well become an attractive investment opportunity.

1. Project Overview

The core of World Liberty Financial is the USD1 stablecoin, which claims to be fully backed by cash and short-term government bonds. The governance layer consists of WLFI. Project documents show a connection to a certain political family: several members of this family are listed as co-founders, and the companies associated with them hold a significant portion of WLFI tokens, entitled to the majority of the protocol's earnings. This is not just a brand effect, but there is an actual financial connection.

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2. The Uniqueness of USD1

Unlike most stablecoins that incorporate reserve income into the company's balance sheet, USD1 adopts an innovative model. The interest generated from its reserves is automatically used to repurchase and destroy WLFI on the open market through smart contracts. This design makes WLFI not only a governance token but also a deflationary asset linked to real-world cash flows.

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3. Issuance Details

• Release Date: September 1, 2025
• Trading platforms: multiple well-known exchanges
• Unlocking rules: 20% of the presale tokens can be traded at launch, while the remaining portion is locked.
• Initial circulating supply: only 5% of the total supply
• Futures market quote: approximately $0.295

These factors may make WLFI a focal point of market attention.

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4. Institutional Participation Status

Multiple institutions have participated in the investment, including:

• An investment institution purchased at a price of $0.10
• A certain fund invested 100 million dollars at a price of approximately 0.125 dollars.
• A NASDAQ-listed company spent $1.5 billion to acquire 7.5% of the total supply at a price of $0.20.

It is rumored that this listed company has been approved for $750 million for a special acquisition of WLFI. Considering that only about 5% of the supply entered circulation at the time of the initial offering, this could have a significant impact on the market.

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5. Potential Factors for Explosive Growth

Three key factors may lead to a rapid increase in price:

1. Scarcity of circulation: Extremely low supply can lead to significant price fluctuations even with moderate demand.
2. Built-in buying pressure: The revenue from stablecoin reserves will be automatically used to buy back WLFI.
3. Powerful narrative: combines political background, institutional support, and the attributes associated with government bonds.

This structural design seems ready to create a rapid price increase.

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6. Risk Warning

Investors need to be aware that fully diluted valuation (FDV) is crucial in the long run. This is more suited for short-term speculation rather than long-term investment. Investors are essentially betting on factors such as low circulation, political influence, and the profit motives of institutional investors.

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7. Related Projects

Two small projects are developing around WLFI:

1. Blockstreet (BLOCK): could become a platform for the cross-chain issuance of USD1.
2. Dolomite (DOLO): A lending platform whose co-founder is currently the CTO of WLF.

These two projects may have a greater impact on the price trend of WLFI.

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8. Summary

WLFI combines multiple attributes in one:

• A new type of stablecoin model
• An experiment that combines DeFi with brand influence.
• A financial structure that may achieve a high valuation

Its design features include an extremely low circulation, significant financial backing, and a mechanism that converts real-world profits into continuous buying pressure for the Token. These factors together create the conditions for a potential price surge.

However, investors should be cautious and recognize the importance of fully diluted valuation in the long run. In the short term, the market cap at the time of the initial offering may be more important than the FDV, but over time, the FDV will become increasingly critical.

In general, this project may trigger a liquidity event similar to certain popular Tokens. Considering the possible seasonal trends in the market, investors may choose to participate at the time of issuance and then exit at an appropriate time to seize potential profit opportunities.

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