coindesk.com
World Liberty Financial minted 25 million $USD1 stablecoins on Monday morning and burned 3 million through its TokenGovernor contract, on-chain data shows, as the Trump-linked venture continues managing the fallout from a lending position that trapped depositors on 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 roughly $75 million it borrowed against its own governance token.
The venture deposited billions of $WLFI tokens as collateral and borrowed stablecoins that were partially routed to Coinbase Prime, pushing Dolomite's $USD1 lending pool to near-100% utilization and leaving other depositors unable to fully withdraw.
Monday's mint was funded through BitGo Custody and executed via $WLFI's $USD1 Mint Authority contract. The 3 million $USD1 burn moved from an address starting 0x2ce to the TokenGovernor contract before being sent to the null address, permanently removing the tokens from circulation.
Smaller test transactions of $10, $10,000, and $40,800 in $USD1 were sent to a previously inactive address in the hours before the mint, a pattern consistent with wallet verification ahead of larger transfers.
The net effect is a $22 million increase in $USD1 circulation. The simultaneous mint and burn indicates active supply management rather than a simple expansion.
However, the burn raises its own question of where those 3 million $USD1 came from and why they were retired rather than redeployed.
Stablecoin issuers routinely burn tokens when collateral is redeemed, but $WLFI has not disclosed the specific reason.
It is not yet clear whether the newly minted $USD1 is intended to replenish Dolomite's lending pool, fund additional treasury operations, or serve another purpose.
$WLFI's governance token has fallen roughly 15% since CoinDesk first reported the Dolomite transactions on April 9. Dolomite co-founder Corey Caplan is an advisor to World Liberty Financial.
CoinDesk has reached out to World Liberty Financial for comment in European morning hours.