- WLFI’s USD1 stablecoin is deployed on Ethereum and BNB Chain, entering a testing phase.
- Lookonchain data reveals Wintermute’s involvement in the token’s early testing, hinting at future use.
- USD1 aims to enhance WLFI’s DeFi liquidity, offering a stable asset for decentralized financial services.
The Trump-associated DeFi fund World Liberty Financial (WLFI) has launched its USD1 stablecoin. The USD1, which is pegged with the US dollar, is supported by both Ethereum and BNB Chain. Initially, the stablecoin is in its testing phase, with limited transactions on both blockchains which can be considered as an early stage of the project.
DeFi Expansion and Multi-Chain Approach
WLFI is employing USD1 as a part of a more extensive DeFi approach. The stablecoin provides users with a dollar-pegged asset that they can use to engage in decentralized trading, lending and borrowing activities. According to data from Lookonchain, the USD1 contract project was employed on both Ethereum and BNB Chain in early March. They are crucial to WLFI’s operations in increasing the network liquidity and accessibility of the DeFi protocols.
Data from Lookonchain also revealed that stablecoin is already live and being used by a market maker, Wintermute, doing transactions with USD1 tokens. This is important because Wintermute’s use of the token demonstrates that the token could be used widely and heralds a potentially smooth launch soon. The stablecoin has been launched with a supply limited to around $3.5M on both Ethereum and BNB chains. Though not public yet, such test transactions precede further activity across various decentralized platforms.
Key Involvement of Binance and Market Makers
Changpeng Zhao, Binance‘s former CEO, stated that he gladly welcomed the USD1 reserve-backed stablecoin issued by the WLFI and praised that the DeFi project is using the BNB chain. The integration with Binance’s network is seen as WLFI’s cooperation with other significant industry players.
According to Lookonchain, which shows data for the test phase, multiple transactions, particularly through the Wintermute wallet indicate that USDT stablecoins are being prepared for more active use on different liquidity pools and decentralized applications.
At this stage of testing, the stablecoin remains within a controlled testnet. WLFI has not yet released all the details regarding its tokenomics, issuance timetable, or backing mechanism for the USD1. However, considering the fact that the project is making strategic decisions to launch the stablecoin on Ethereum and BNB Chain, it has the potential to be adopted in high-traffic networks.
The Growing Stablecoin Ecosystem
WLFI makes its entry as a new contender in the fast-growing sector of stablecoins with the launch of USD1. With a wide array of stablecoins currently operating in the market, WLFI’s USD1 aims to establish its niche and become a trusted and reliable dollar-pegged digital asset. For instance, this year, Tether generated $13 bn of profit mainly from reinvesting the customers’ funds into U.S. Treasuries, demonstrating that stablecoins are profitable for the issuers.
As WLFI expands adoption across both the Ethereum and BNB Chain networks, USD1 is set to be integrated into various DeFi platforms for trading and lending. However, regulatory questions around stablecoin legislation remain challenging, with ongoing debates about the legal frameworks surrounding these digital assets in the U.S.
