- A World Liberty wallet reportedly lent $75 million in stablecoins $WLFI tokens and later sent more than $40 million to Coinbase Prime.
- DeFi analysts warned that the $WLFI-backed position on Dolomite could become difficult to liquidate if the token price falls.
A large loan position linked to World Freedom is receiving renewed attention after onchain observers noted both its size and timing.
According to the details circulating among DeFi researchers, a wallet linked to World Liberty is used $WLFI tokens as collateral to borrow $75 million in USD1 and USDC on Dolomite. More than $40 million of that was then transferred to Coinbase Prime, with the move said to have taken place just hours before Donald Trump’s announcement of a ceasefire between the US and Iran.
A large collateral position is starting to worry lenders
The immediate concern is not just that the loans were large. The problem is that the underlying collateral can be difficult to release if the markets move in the wrong direction.
X analysts argued that the position poses an increased risk of bad debt for other lenders on Dolomite, especially if $WLFI falls to liquidation levels. That’s where the structure starts to look fragile. Collateral may be valued at a high valuation on paper, but when real market liquidity is scarce, liquidation becomes more of a theory than a mechanism.
One researcher, posting under the name EthanDeFi, said the the position was effectively ‘non-liquidable’ near stress levels without causing significant losses to lenders. The point there is quite simple. If too much collateral has to be sold while there is too little demand, the protocol may not recover value quickly enough to protect everyone upstream.
The deeper problem is liquidity, not overall valuation
That distinction is important because $WLFI‘s reported fully diluted valuation may appear large, around $10 billion according to the figures cited in the discussion, while the actual market depth appears much smaller. In DeFi, that gap can be dangerous.
It means that a token can support aggressive lending in calm conditions, but can function poorly as collateral during stress.
The Coinbase Prime transfer has also heightened scrutiny due to its reported timing. Even without drawing conclusions from that alone, the series has made lenders more sensitive to the counterparty risk surrounding the position. For users who accept stablecoins lent in Dolomite pools $WLFI collateral, the debate has quickly shifted from return to recoverability.