Trump's cryptocurrency is on sale with Election Day just three weeks away

With shares of his social media startup rebounding amid a sharp rebound and just three weeks before the presidential election, Donald Trump is bringing his latest proposed money-making endeavor to the market, this time in the cryptocurrency space.

On Tuesday, the former president and current Republican candidate aims to launch WLFI, the companion token for his new cryptocurrency project called World Liberty Financial. Over the weekend, Trump announced the sale in a post on X, telling his followers it was an “opportunity to help shape the future of finance.”

Potential investors can be forgiven for having no idea what they are being asked to support.

People involved with WLF described it as a kind of cryptocurrency bank, where customers will be encouraged to borrow, lend and invest in cryptocurrencies. No official white paper or formal business plan has been released to the public, and all that has been revealed is that investing in the project will give users voting rights on the yet-to-be-launched WLF platform.

In the roadmap provided to potential investors and first seen by The Block, the WLF proposal says the coin is looking to raise $300 million at a valuation of $1.5 billion in its initial sale. CNBC reached out to WLF for comment but did not receive a response.

World Liberty Financial is separate and apart from Trump Media and Technology Groupthe parent company of the social media platform Truth Social. Trump Media, known by ticker symbol DJT, began trading in March, after going public through a special purpose acquisition company (SPAC). It's been a rocky road for the stock, which peaked at nearly $80 in late March, before falling to $12.15 last month.

But since bottoming on Sept. 23, DJT shares are up nearly 150% at $29.95, giving the company a market cap of $6 billion. This is on revenues of less than $1 million per quarter and after the company lost more than $16 million in the recent period.

While anyone can buy DJT shares, the WLFI token will be a Regulation D token offering, following a provision that makes it possible to raise capital without first registering securities with the Securities and Exchange Commission. Certain conditions must be met, such as limiting the size of the sale and limiting it to accredited investors, which is defined in part as having a net worth of more than $1 million.

Trump owns about 57% of DJT's outstanding shares, but his potential control of World Liberty Financial is more ambiguous. The WLF website, which is currently a KYC registration landing page for purchasing the coin, includes some subtleties indicating the founders' financial incentive.

Co-founder Zachary Volkman, who previously had a company called Date Hotter Girls and reportedly helped develop the cryptocurrency project Dough Finance, said 20% of WLF tokens will be allocated to the founding team, which includes the Trump family.

There seems to be another way they can make money.

“DT Marks DEFI, LLC and its affiliates including Donald J. Trump and members of his family have received or may receive tokens from World Liberty Financial, and will be entitled to a significant fee for services provided to World Liberty Financial, an amount that cannot be determined After,” the website says.

On Monday, less than 24 hours before the planned token launch, the WLF team held a chat on X Spaces to share details of the sale. About 12,000 people listened to the more than hour-long conversation about the project's overall goals.

Volkmann reiterated what he said at a previous Spaces event, telling attendees that WLFI is a governance token that allows its holder to vote on decisions related to the protocol, including initiatives like promotional partnerships. Token ownership “is not property” and “does not represent an economic right,” he said.

The token sale will take place exclusively on the World Liberty website, and only those who are whitelisted after registration will be able to participate, Volkmann said. He said that “more than 100,000 people” were on the white list and that it was not too late to register. Volkmann added that WLF will publish the “long-awaited” roadmap for the project on Tuesday, along with the token sale.

Last week, WLF began the process of getting its cryptocurrency bank approved by the decentralized finance (DeFi) ecosystem known as Aave.

Aave is open source software, and in DeFi, it is one of the oldest and most trusted cryptocurrency lending platforms.

“The protocol itself is permissionless, so I'm less opinionated about integrations, because that's the whole idea of ​​decentralized finance,” Aave founder Stani Kulichov told CNBC in an interview at a permissionless conference in Salt Lake City, Utah.

Kulechov joined the X event on Monday and said he was “excited that the WLF is using and relying on Aave.

“This is a strong signal that what we are building is somewhat useful, so we are very excited,” he said.

In a 400-word post for the Aave Governance Forum, the WLF team provided an outline of its goals, which include promoting “DeFi to a broader audience through its marketing efforts,” and introducing “a new class of users for hyper-collateralized borrowing.” and lending.” The proposal is currently in the preliminary phase of the study known as “Temp Check,” and Aave users can comment on the plan.

In the comments section, a number of users expressed concern about the project's deep ties to the Trump family.

“I think this proposal poses a huge risk to the Aave protocol for little gain,” according to one comment that has since been deleted. The commenter then questioned the rationale behind having “the largest and most trusted protocol in DeFi” working with a group led by “people from questionable backgrounds… including several convicted criminals.”

Volkman helped found WLF with longtime business partner Chase Herro. CoinDesk reported that the duo previously worked on Dough Finance, which was also built on top of Aave and suffered a $2 million hack in July. Herro also launched another cryptocurrency trading company a decade ago called Pacer Capital, which appears to be defunct now.

For World Liberty to continue moving forward, it must go through multiple rounds of study and approval, each determined by a vote among current AAVE token holders.

At this point in the process, the token sale is an IOU. Those who buy now have the right to claim the token should the platform be approved and launched.

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