World Liberty Financial hit 25 million $USD1 stablecoins on Monday morning and burned 3 million through its TokenGovernor contract, on-chain data shows, as the Trump-linked company continues to manage the fallout from a credit hold that locked depositors into the DeFi protocol Dolomite.
The activity follows $WLFI‘s statement last week, posted in response to CoinDesk’s reporting on the Dolomite transactions, that it had repaid $25 million of the approximately $75 million it had borrowed against its own governance token.
The company has deposited billions $WLFI collateralized tokens and borrowed stablecoins that were partially routed to Coinbase Prime, enabling Dolomite’s $USD1 credit pool is almost 100% utilized, leaving other savers unable to withdraw completely.
Monday’s coin was funded through BitGo Custody and executed via $WLFI‘S $USD1 Mint Authority Contract. The 3 million $USD1 burn moves from an address starting with 0x2ce to the TokenGovernor contract before sending it to the zero address, permanently removing the tokens from circulation.
Smaller test transactions of $10, $10,000 and $40,800 $USD1 were sent to a previously inactive address in the hours before the coin, a pattern consistent with wallet verification prior to larger transfers.
The net effect is an increase of $22 million $USD1 circulation. The simultaneous mint and burn indicates active supply management rather than simple expansion.
However, the fire raises its own question of where those 3 million come from $USD1 came from and why they retired rather than redeployed.
Stablecoin issuers routinely burn tokens when collateral is redeemed, but $WLFI did not reveal the specific reason.
It is not yet clear whether the new one was minted $USD1 is intended to supplement Dolomite’s credit pool, finance additional treasury operations or serve some other purpose.
$WLFIThe governance token is down about 15% since CoinDesk first reported the Dolomite transactions on April 9. Dolomite co-founder Corey Caplan is an advisor to World Liberty Financial.
CoinDesk contacted World Liberty Financial for comment in the European morning hours.