World Liberty Financial co-founder Zak Folkman firmly defended the project’s $75 million borrowing position on Dolomite Markets during Consensus 2026, describing it as “a very, very small loan” intended to boost protocol utilization. The defense comes after on-chain data showed a World Liberty wallet depositing roughly 5 billion WLFI tokens into Dolomite and borrowing about $75 million in USD1 and USDC stablecoins against that collateral, with more than $40 million subsequently moved to Coinbase Prime.
DeFi researchers quickly flagged concentration and liquidation risks for Dolomite lenders, citing the illiquid nature of WLFI as collateral and the potential for a forced unwind to harm other users. Folkman pushed back, stating World Liberty had been the largest liquidity supplier on Dolomite prior to the loan and that the resulting activity lifted overall market liquidity.
The interview also addressed a separate legal clash: Tron founder Justin Sun’s April 22 lawsuit alleging World Liberty froze his WLFI tokens and deployed undisclosed blacklist functionality, blocking governance participation. Folkman called the claims “blatantly false,” said the 20% unlock terms were disclosed in the project’s terms and conditions, and highlighted that the smart contract code was fully visible on Etherscan. World Liberty has retained the law firm Quinn Emanuel to file a defamation counter-suit, which Folkman called “cut and dry.”
Folkman acknowledged heightened scrutiny due to the company’s ties to President Donald Trump, calling the affiliation both a “blessing and curse.” Meanwhile, World Liberty’s USD1 stablecoin is nearing a $4.5 billion market cap, making it what Folkman labeled the “fastest-growing stablecoin of all time” and the first to integrate Chainlink Proof of Reserves. To cement its institutional footing, World Liberty has filed an OCC charter application for a Limited Trust Company to act as the stablecoin’s official issuer—a move that could place USD1 under regulated trust-company infrastructure if approved.
