World Liberty Financial’s USD1 Stablecoin Airdrop Sparks Debate Over Centralization and Transparency

Inside World Liberty Financial’s Controversial USD1 Stablecoin Airdrop and Its Market Implications

World Liberty Financial, the crypto project backed by U.S. President Donald Trump, reportedly distributed USD1 stablecoins to wallets holding its native token WLFI, according to blockchain analytics firms Lookonchain and SlowMist. On Tuesday night, a wallet linked to the project sent 47 USD1 tokens to each WLFI holder in a bulk transfer, as revealed by Etherscan data.

The project had previously disclosed that over 85,000 participants in the WLFI token sale completed the know-your-customer (KYC) process by March. Although the USD1 airdrop was not officially announced, the team had proposed distributing a “small amount” of the stablecoin to WLFI holders as a test of the on-chain airdrop functionality on the Ethereum mainnet. This initiative also aimed to promote the recently launched stablecoin while thanking supporters.

A snapshot vote for the airdrop proposal held last month saw overwhelming approval with 99.96% support from WLFI holders.

USD1 Stablecoin Backed by U.S. Treasury Assets Amid Regulatory Shifts

Launched in March, the World Liberty USD1 stablecoin claims to be fully backed by short-term U.S. government treasury securities, U.S. dollar deposits, and other cash equivalents. This launch came during significant regulatory changes, as U.S. lawmakers push the GENIUS Act, which emphasizes transparency and safety for stablecoin issuers.

With Trump’s public endorsement, dollar-backed stablecoins have surged in popularity, recently surpassing $250 billion in total market capitalization, attracting both institutional and retail investors.

Controversies Surrounding Trump’s Role and Token Centralization

Despite its growth, concerns linger over potential conflicts of interest. According to the project’s whitepaper, Trump and his three sons hold ambassadorial or advocacy roles, which has drawn scrutiny. Last month, World Liberty’s attorneys dismissed Senate Democrat Richard Blumenthal’s claims that the Trump family gained “substantial” financial benefits from WLFI, calling such accusations “fundamentally flawed.”

Another key concern is the token’s centralization. Data from Dune Analytics shows that just two wallets control 84.4% of the USD1 stablecoin supply, with a third wallet holding 9.5% more. It remains unclear whether these wallets belong to World Liberty Financial, major investors such as Justin Sun, or custodial services like BitGo.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.