Trump family crypto venture World Liberty Financial Inc. is facing an investor revolt led by billionaire Tron founder Justin Sun, one of the project’s earliest and largest backers. The controversy arose after WLFI took out a $75 million loan backed by three billion of its own WLFI governance tokens, shortly before a large block of tokens is due to be unlocked for sale on the open market — something that usually drives a token’s price down as holders are finally allowed to sell. WLFI issues the USD1 stablecoin, which has a market cap of just over $4 billion. The problem with the loan, critics say, is that it could let…
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Liquid Staking Issues & Perils
There are efforts to mitigate centralization, but extreme market volatility risks contagion
In our recent article Staking and Liquid Staking: a Primer we covered the fact that staking is rapidly becoming a substantial ecosystem of its own, including via increasing uptake from institutional investors. We explained the differences between simply staking tokens and liquid staking, which enables investors to pledge their tokens but also achieve liquidity by receiving a new token known as a liquid staking token (LST) or liquid staking derivative (LSD), which is typically deployed in decentralized finance (DeFi) to earn yield or other benefits. Sounds great, so what’s the catch? Well, in addition to the potential catches inherent in any young and relatively untested technology – crypto generally but…
