The new crypto venture comes after former President Donald Trump’s family launched World Liberty Financial with the goal of creating a US dollar-backed stablecoin. This detailed guide explains their plans to enter the cryptocurrency market and compete with established players such as Tether and USDC.

Launch of Donald Trump’s crypto project and initial financing

World Liberty Financial’s entry into the crypto space has attracted significant attention, although initial fundraising efforts fell short of expectations. Despite a goal of raising $300 million, the project only raised $14 million in its initial token sale, with investors purchasing just 4.7% of the available tokens.

This humble start has not dampened the team’s ambitions to create a significant presence in the stablecoin market. The project is now reportedly planning to develop a stablecoin pegged to the US dollar, as reported by Decrypt.

Trump’s crypto project World Liberty plans to release a stablecoin, sources say (via @decryptmedia) https://t.co/UrMN4tEhKZ

— jonnycomp (@jonnycomp344502) October 29, 2024

Although the WLFI token has not been warmly received, the proposed stablecoin is expected to have a better chance of success.

WLFI token price. Source: Coinpaprika.com

Stablecoin Vision

The cornerstone of the project is the development of a US dollar-pegged cryptocurrency that will enter a market dominated by established players such as Tether and USDC. The World Liberty team views its stablecoin as more than just another digital asset – it is positioned as a critical tool for maintaining the dominance of the US dollar in the digital economy.

The stablecoin will maintain a 1:1 relationship with the US dollar through proper collateral, which distinguishes it from the failed experimental approaches that have plagued the industry. This conservative approach reflects lessons learned from past market failures, notably Terra’s collapse in 2022, which resulted in billions in losses.

Technical leadership and market position

A significant boost in confidence in the project came with the appointment of Rich Teo, the former co-founder of Paxos, as head of stablecoin development. Theo’s experience with the dollar-backed Paxos Standard Token brings valuable experience to this initiative. Under his leadership, the team works diligently on safety protocols and regulatory compliance before going to market.

• Rich Teo, who helped create another successful digital money company called Paxos.
• Barron Trump as DeFi’s “Chief Visionary”
• Eric and Donald Trump Jr. as “Web3 Ambassadors”
• Donald Trump as the “Chief Advocate of Cryptocurrencies”

Market context and competitive environment

The timing of World Liberty Financial’s market entry coincides with unprecedented growth in the stablecoin market. Tether’s recent results, reporting profits of $5.2 billion in the first half of 2024, demonstrate the sector’s potential. The total market capitalization of stablecoins exceeding $172.8 billion indicates significant opportunities for growth and competition.

Governance structure and token economics

The project’s governance model is based on the WLFI token, which gives owners voting rights when making decisions on the platform. The ownership structure shows a significant concentration of insiders, with 70% of the shares owned by the Trump family and its associates, 20% owned by the founders and 10% available to the public. This distribution has generated both interest and concern among potential investors.

Project ownership tells us a lot about who is in control:

Integration and development strategy

World Liberty Financial builds its platform on top of existing infrastructure using the Aave V3 protocol on Ethereum. This strategic choice allows for seamless integration with existing DeFi platforms while providing the foundation for mass adoption. The team emphasizes accessibility for users, with Eric Trump stating his commitment to making the platform “intuitive and user-friendly.”

The project plans to integrate with:

• Largest cryptocurrency exchanges
• DeFi platforms
• Bitcoin trading pairs
• Stablecoin and payment networks

Future Outlook and Market Impact

As the project progresses towards its planned launch in the first half of 2025, several critical factors will influence its success. The team must navigate regulatory requirements, secure additional funding, and gain market trust. The project’s association with Trump’s name attracted significant attention, potentially providing what one expert called “the most free marketing any cryptocurrency company could ever get.”

The development team prioritizes security and compliance, recognizing the importance of proper oversight in the stablecoin sector. This cautious approach reflects an understanding of the regulatory scrutiny that cryptocurrency projects face, especially those associated with stablecoins.

To sum up

World Liberty Financial represents an ambitious attempt to combine traditional financial power with cryptocurrency innovation. Although the project faces significant challenges, including a lack of funding and intense competition, its unique positioning and vocal support make it a noteworthy development in the cryptocurrency market. While the team works to launch them, the crypto community is keeping a close eye on whether this venture can successfully bridge the gap between traditional finance and the digital asset ecosystem.

The success of this initiative could significantly impact the future of stablecoins and decentralized finance, potentially changing how digital assets interact with traditional financial systems. However, the project’s ultimate success will depend on its ability to realize its vision while maintaining regulatory compliance and building market confidence.

Frequently Asked Questions

What are Trump’s plans for a cryptocurrency project with a dollar-backed stablecoin?

World Liberty Financial, backed by the Trump family, is developing a US dollar-backed stablecoin that aims to maintain the US dollar’s dominance in digital finance. The project has already launched its governance token WLFI and raised $14 million with plans to create a fully backed stablecoin that maintains a 1:1 peg to the US dollar. The project will run on the Aave V3 protocol and is being developed under the leadership of former Paxos co-founder Rich Teo.

What makes this stablecoin different from others?

The project emphasizes: full dollar backing, integration with decentralized financial platforms and association with the Trump brand. Moreover, it is focused on maintaining the dominance of the US dollar.

It enters a market dominated by established players such as Tether and USDC, which have market capitalizations in the billions and a proven track record.