WLFI Mints $25M USD1, Burns $3M: A $22M Jump After Repayment Claim

Markets

What to know:

World Liberty Financial created 25 million USD1 stablecoins on Monday and then destroyed 3 million of them using its TokenGovernor contract, according to blockchain data. This activity comes as the company, which has ties to Donald Trump, deals with the consequences of a loan issue that left depositors stuck on the DeFi platform Dolomite.

This action comes after WLFI released a statement last week addressing CoinDesk’s report about the Dolomite transactions. In that statement, WLFI said it had paid back $25 million of the approximately $75 million it borrowed using its own governance token as collateral.

The project used billions of WLFI tokens as security to borrow stablecoins. Some of these stablecoins were sent to Coinbase Prime, which completely filled up Dolomite’s lending pool of USD1. This prevented other users from being able to withdraw their funds completely.

The recent mint on Monday was financed through BitGo Custody and carried out using WLFI’s USD1 Mint Authority contract. A total of 3 million USD1 tokens were destroyed – they were first transferred from an account beginning with ‘0x2ce’ to the TokenGovernor contract, and then sent to a non-existent address, effectively removing them from circulation permanently.

As I’ve been analyzing the transactions leading up to the mint, I noticed some interesting activity. Several small test transactions – $10, $10,000, and $40,800 – were sent to an address that hadn’t been used before. This looks like someone was likely checking to make sure the address was working correctly before sending a larger amount, a common practice for wallet verification.

Overall, this results in $22 million more USD1 in circulation. The fact that new coins were created while others were destroyed suggests a deliberate effort to manage the supply, not just increase it.

But the fact that these funds were destroyed raises questions about where the $3 million originally came from and why they weren’t used for something else instead.

Stablecoin companies usually destroy tokens when people cash out their collateral, but WLFI hasn’t explained why they haven’t done so.

We still don’t know exactly what the new USD1 will be used for – it could be to add more funds to Dolomite’s lending pool, support other treasury activities, or something else entirely.

Since CoinDesk reported on the Dolomite transactions on April 9th, the value of WLFI, its governance token, has dropped around 15%. Corey Caplan, a co-founder of Dolomite, also serves as an advisor to World Liberty Financial.

CoinDesk has reached out to World Liberty Financial for comment in European morning hours.

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2026-04-13 15:40