David Krause, a finance professor at Marquette University in Milwaukee and an author of a study on World Liberty, expressed concerns about the project favoring a select group over public investors or token holders when it comes to financial participation.
Jim Angel, an associate professor at Georgetown University, also questioned the economic benefits for token owners within the project.
Comparing practices in the decentralized finance (DeFi) industry, it was noted that World Liberty, with the Trump family holding a significant portion of the venture's revenues and the governance tokens not being tradable, is more centralized than other major DeFi lending platforms.
Reports indicate that the Trump family is positioned to receive a substantial portion of net revenues from token sales and operations, with $400 million in fees currently due to them. Following payouts to co-founders, the venture will be left with a small percentage of the funds raised for platform development.
The Trump family assumed control of World Liberty in January, with a high percentage stake and authority previously held by co-founders Folkman and Herro.
The $WLFI tokens provide holders voting rights but cannot be traded, yet World Liberty disclosed raising $550 million through governance token sales, mainly initiated post-Trump’s election victory.
The goal of World Liberty is to enable individuals to access financial services through cryptocurrencies without banks. However, the platform is still in development and has a limited staff.
World Liberty's management by the Trump family has faced scrutiny for potentially favoring insiders and shareholders. Critics have raised concerns about conflicts of interest and the potential for political influence resulting from the family’s involvement in the venture.
Described as an outlier in the DeFi landscape, World Liberty's governance tokens lack features common in other platforms, such as profit-sharing voting mechanisms for token holders.
The project's future plans include launching financial products like a lending market and a stablecoin. Collaboration with Ondo Finance, a startup offering blockchain-backed tokens, indicates efforts to expand the adoption of tokenized real-world assets.
Despite financial backing, regulatory hurdles and concerns about governance raised by experts highlight potential challenges for World Liberty moving forward.