Source: Galaxy; Compiled by: Golden Finance
After a month of waiting, World Liberty Financial (WLFI) token holders will see the token become tradable on the spot market at 8:00 AM ET on Monday, September 1st (8:00 PM BST). A month ago, WLFI holders voted in favor of the project’s third governance proposal, with 99.94% of tokens voting in favor of making the token tradable.
The first on-chain unlock window will open through the Trump family-led project's "lockbox," allowing qualified buyers to claim 20% of their presale allocation, with subsequent unlocks set aside for future governance votes. The on-chain "lockbox" contract currently holds approximately 15 billion WLFI tokens, representing 15% of the project's total supply. This will create a short-term liquidity event, during which nearly 3 billion WLFI tokens (worth approximately $950 million at recent prices) will begin trading, followed by DAO-driven supply decisions in the weeks and months to come.
Notably, of the 85,873 wallets holding WLFI prior to the lockbox launch, over 30,000 had locked all of their WLFI in the contract (a prerequisite for trading).
Galaxy's take:
By any measure, this represents one of the most active and engaged token holder groups in the cryptocurrency space. Over a third of holders are active on-chain, consistently updating and interacting with the WLFI smart contract, a significant achievement in the DeFi space. Much of the DeFi landscape suffers from low governance participation—dynamic protocols are often used to tax inactive holders.
While the active user base is commendable, the large number of wallets committing all their assets to the lock-up system demonstrates widespread trading interest. The first wave of WLFI holders who purchased at $0.015 per token saw a 20x return, while the second wave, at $0.05 per token, saw a roughly 6x return. The appetite to hedge and liquidate these positions will be high; a simple calculation shows that by selling just a portion of the 20% unlocked share, holders will receive the equivalent USD value of their entire investment.
Based on pre-market trading levels, WLFI's fully diluted value is approximately $20 billion at $0.20 and approximately $42 billion at $0.42. With 20% of the approximately 15 billion WLFI remaining in the WLFI lock-up set to unlock on September 1st, we expect at least 3 billion tokens to be in circulation. At $0.20 per share, this equates to approximately $592 million in circulation; at $0.42 per share, this equates to approximately $1.24 billion. In other words, the initial issuance represents 20% of the $0.015 and $0.05 pre-sales, representing a maximum of 5% of the total supply—exactly the type of tokens Alameda has been keen to trade in the past, with low circulation and high FDV.
Pre-market trading is very active. Binance's open interest (OI) is approaching $250 million, with 24-hour trading volume exceeding $500 million. WLFI trading volume on the Hyperliquid platform exceeds approximately $1.5 billion, with open interest valued at approximately $60 million. Pre-market trading should always be viewed with a grain of salt due to structural weaknesses: prices are a consensus among participants, with no external spot oracle, allowing market forces to drive prices. This dynamic was exemplified last week when a well-funded trader took advantage of Hyperliquid XPL pre-market trading, roughly tripling the price in a short period of time and triggering widespread short liquidations. Funding on Hyperliquid's "hyperps," as well as nearly all pre-market markets, is calculated based on a moving average of closing prices rather than an external spot reference, which can amplify these events.
The first wave, floating between $0.20 and $0.42, represents hundreds of millions, if not more than $1 billion, of notional tokens entering circulation. This scale typically results in significant basis fluctuations and capital skew as spot markets open and cross-exchange liquidity rebalances. Cross-exchange basis spreads should narrow as spot trading begins, but volatility will not disappear. Despite active trading, the size of the unlocking could still exceed current pre-market open interest and trigger significant price fluctuations.
Numbers aside, it's important to remember what the WLFI token represents. WLFI's "Gold Paper" terms stipulate that the token is for governance purposes only: no revenue, no distributions, no equity, and no rights to the protocol's cash flows. The same terms disclose a fixed grant of 22.5 billion WLFI to DT Marks DeFi, LLC (affiliated with Donald J. Trump) and a revenue-sharing agreement that allocates 75% of net protocol revenue to that entity and 25% to insiders other than token holders. WLFI governance votes are used solely for signaling and can be overturned at the World Liberty team's discretion. World Liberty Financial's most profitable project to date is its $1 stablecoin (developed by Binance Code), which was launched without any forum posts or governance votes.
If you are a memecoin trader or interest rate trader, good luck. If you are more focused on fundamentals, please reread the above paragraph.
