The Wolf Of All Streets - WLFI Loop Exposed: What Impacts on DeFi & CLARITY?! #CryptoTownHall

Episode Date: April 10, 2026

In this episode, the team breaks down the controversial World Liberty Financial (WLFI) drama after they borrowed $75M in stablecoins against billions of their own WLFI tokens on Dolomite — temporarily trapping depositors and pushing the pool to near 100% utilization. The discussion explores whether this self-referential lending move is smart DeFi engineering or a major red flag for the broader ecosystem, its potential impact on the upcoming Clarity Act, and the critical need for better disclosure and transparency in DeFi. The conversation also touches on quantum computing risks to XRP vs Bitcoin, market liquidity dynamics, and why basic regulatory clarity matters. Learn more about your ad choices. Visit megaphone.fm/adchoices

Well, yeah, so we put the title about this Coin desk article. I don't know if everyone read it about the World Liberty Financial and the kind of self-referential loop where they effectively extracted fiat from, you know, their own pledging their own token as collateral, effectively freezing. Okay, good. Yeah, Carla, thank you, Carla, putting, effectively freezing the DFI protocol or other participants

that EFI protocol for meaning doing anything. And, you know, I'm not speaking about this. Those people didn't know that, by the way. What do you say? But those people didn't really know that. Those people meaning the people participating in the protocol.

Correct. The other people, I don't think, we're aware that the pool is, you know, 93% collateralized, but effectively by one entity. But, yeah. Right. And that's, my point on this is not so much the obvious. This isn't about Trump back.

or any other crap. This is about the fact that the entire defy ecosystem has enormous issues that are undisclosed to people who participate in it. And this is going to be meat to the, you know, meet to the lions on the regulatory side because it is exactly the sort of thing that good regulators care about. I mean, if you've, you know, if you've been watching, reading, et cetera, you know, Hester Purse's commentary over the last seven years, you would know that what she cares about and accurately so, I think, I totally agree with her, is disclosure and the ability for people to understand what they're involved with, understand the risks and make sure they are disclosed,

and that will allow the market to work effectively. You know, this is a classic example of yet another part of the defy ecosystem and the crypto ecosystem that people just don't really understand and things can happen. Carlo, I hopefully have teed you up. Yes, you did. Good morning, Scott. Good morning, Dave. Good morning, Carlo. So I put out a piece this morning because I think it's a broader problem. You're absolutely right, Dave. But I think it goes beyond that because this could not have been timed worse as we're on the verge of trying to land the Clarity Act.

You've got Bessent. You've got the SEC. Everyone's saying we need to pass the Clarity Act. Everyone seems to be hopeful that this mysterious markup, which we've still yet to see, is going to be the fix. But this raises three major problems. Number one, it reignites the debate about the ethics conflicts with respect to the Trump family and crypto. It opens up the debate about yield on DFI because remember the consumers who put their stable coins in this protocol, can't get it out because the liquidity has been drained.

So they went from getting a very nice yield on their World Liberty stable coin to now potentially not being able to get out. And the third problem is defy, exactly that issue, disclosures, and these are all debates that are being currently hashed out. And now we're a week away from having the floor debate and markup on this thing to leave the Senate. And this is going to give the Democrats in the Elizabeth Warren camp three major talking points to kill this thing. And this is like the most incredible enforced error. Well, hold on a minute. Hold on a minute. I actually take the other side of it.

This doesn't give the Democrats. This is something that any sane person, Republicans are all real-said. No, yeah, yeah. I'll give you that. Let me finish my point. This cuts out Elizabeth Warren at the needs because the point is these things are happening because there is no clear providential prudential regulator involved. And so what is needed is to delegate authority to regulators in the U.S.

that actually can require companies like World Liberty to do X, Y, and Z in terms of, and the BD-5 protocols to disclose. These problems happen because of a lack of regulation. You know, not all regulation is bad. A lot of it is. A lot of regulation is written by the companies to create moats and, you know, and competitive weapons for them. But basic disclosure sort of rules are good. And without clarity, this is exactly the sort of thing that would happen. In fact, if they were trying to persuade Democrats, I would point to this case. That's the difference. And I don't really understand the other side. I mean, what am I getting wrong, Carl? I'm concerned. And you make a valid point. And I like it. I like that you see that angle. My primary concern when I saw the news break was that this is going to put this potential legislation in protracted debate now about the things that we all have worried would be the killers of this bill, including now really having a case to box Trump in on an ethics clause in this thing. So my broader concern is, yeah, I think I like your point that it may give the Republicans some high ground to say, yeah, this is exactly why we need clarity. But I also am

concerned it's going to give the opportunity for people who don't want to see crypto adoption to kill this bill because they'll say, look, you see what they did? They extracted all this money. they send it to Coinbase. The blockchain has revealed all this, you know, fuckery. This is another Luna type event. And that's already the narrative I'm seeing flying around the timeline. That's what concerns me, that they're going to use this as a reason to completely kill the bill. Yeah, it boggles my mind.

I don't think I'm that smart of a human being. I mean, I'm intelligent. Okay, fine. But it's so freaking obvious that that take is a terrible take. I mean, you know, we watched FTX be the only place, the only person to give access to the regulators, and we watched them steal and leave back doors for their own trading. None of which would be possible if they were under any rational regulator. Look, I've run multiple broker dealers, okay? I know how FINRA operates, knows the SEC operates.

No, the CFTC operates. There is no chance you could get away with the sort of thing they did if they were even, under the most basic, they're called TAMS exam, you know, where they, they, they, they try, there's just no basic regulatory audit where they could have gotten away with it. And yet, people use that to say, well, that that proves how fucked up crypto is. Well, I'll tell you what's fucked up. What's fucked up, Carlo, is when you allow people to make money and you don't, and that they can do so in a way that is, is damaging to the public, is not really informed. that they're taking advantage of people by what they're not telling them.

We generally tend to call that fraud, but it's very hard to prove intent, right? I'd love to see you write that piece, Dave. I think it's very timely and important that you write that piece. Yeah, I guess I will. I think it's time for, I think it's time for another video. You know, that's all right. So I'll do that. David, we've got another hand.

So it's not just the Carlo and Dave show. Yes, yeah, since it's Friday and we should have a little bit of humor, I think we should just collectively launch an Epstein token because, I mean, anybody holds it's going to get screwed. I mean, does anybody else, you know, think, I mean, I made the joke before, but I actually think it's possible. I mean, you know, having met Gary Gensler and knowing how smart he is, I mean, I think he's malevolent, but I do think he's very smart. I actually think that him opening the door to allow people to invest in meme coins

was intentional to try to kind of push out the shit to basically collapse the all coin market in the end. I actually think that that was intentional. And I know that's a... That's interesting because you think that he intentioned. It's not like they ever issued guidance

saying you can do meme coins. As I remember at the industry basically said, well, we can do meme coins, so we're going to. No, no, they did. They issued guidance that says meme coins are not security. They absolutely did. So it's interesting. I mean, look, he is a bitcoiner.

And in a sense, I mean, when he was teaching MIT, he talked about it that way. I mean, of course, he wasn't all that great for the Bitcoin industry either. But the truth is, is he did help the alt industry, you know, kind of self-immilate. Lou, I see a new hand. I know that's a new one. Hey, yeah. I mean, I think there's another side to this argument that is not being talked about, and that's for a bunch of people who I think are libertarians, is, you know, I generally think that people should be allowed to buy what they want to buy. And I think the less the government is in my face telling me what I can buy and what I can't buy, I think that's better.

And if people want to buy me coins, I think people should be allowed to buy me coins. Sure. And, you know, sitting here and saying, you know, what we need is more government and, you know, telling us what we can do and can't do. I think that's a bad take. Well, but here's the thing, Lou, I think of it this way, because, look, I am a libertarian at my core, free speech at my core. The one thing that disturbs me the most are externalities, right? you know, things that people can't do anything about. So like, you go into a supermarket and you buy beef. Now, you care about this, you don't want, you want, you don't want to have to worry,

is there, are there toxins in this meat? You don't, you know, you want to understand, you know, that labels, if it says it's organic, that these weren't hyped up, you know, cows that were fed all sorts of steroids. I mean, you literally care about that. So the, the, in investing, you want to know what's behind it. You want to understand what you're investing in, not just because your buddy down the street told you so. The truth is, most people don't care. Most people won't even look, but some people will.

And so if you're forced to disclose, we could create 10 billion of these things. You think you're buying something that's scarce, but it isn't. Like the difference of buying like a lithograph. and that says one of 100, if the artist actually made 10,000, you would have a real good cause of action.

Well, in the mean coin world, we don't know. And I think it's not about stopping. Well, that's actually, that's not true. That is not true. You could go into the code and you can actually see what they can do and what they can't do. You can see if they want to,

they can issue a trillion coins. And you know that if you're invested in that, you are investing in that. You might not know that. You might not go in read the code. you might not know that code even exists. And again, what we're talking about now is, you know, is the balance of how much do we want to allow people to buy what they want to buy?

And if somebody wants to buy something because their neighbor down the street told them to, I think that's a fine reason for them to buy if they want to. Well, you and I are never going to agree on that. I think that I am very much against paternalism in the sense. I'll never forget, Bloomberg lost me when he started, when he wanted to ban 32-ounce, coques. Isn't that exactly what you're doing?

You're telling the people down the street, don't take that Coke that your neighbor is trying to sell. No, I'm telling people that understand how much sugar is in that Coke. It's very different than saying you can't buy it. Sorry, I have something going on my throat. But you are saying they can't buy it. You want the government to come in and tell people that they cannot buy mean coins. No, 100% no.

I just want to know. I just want there to be standing. Well, by the way, so people went in and about meme coins and you said that's a bad thing. No, I said I think you're dumb, but I did it too. I mean, I didn't lose much, but, you know, I don't think my investment in smoking chicken fish is doing too well. I haven't looked at it in about a year. But, you know, so be it. No, what I'm saying, Lou is, is not to ban it.

I never, never in a billion years would I say that. What I'm saying is that there should be, like if you invest in a defy protocol and you, you know, you're getting a yield, you should know, A, where the yield comes from. Maybe they do, Dave. Yeah. What respect to. I did say something earlier, but I'm assuming actually to lose points, even in this case, like if you are putting, you know, liquidity into a pool, you should actually, I'm assuming

you can transparently see what's in there. So it is, the onus still is on the individual to decide what DFI protocol to use or not to. So I'm not sure if that's the issue here for disclosures as World Liberty Financial or if it's just, you know, taking a look at the risk that they're taking on, which probably is entirely legal and the way that they're doing this. I mean, I don't want to take for granted that people have even seen the story, right? Yeah, no, I think that's right, Scott. And it's entirely possible here. Let's be clear. It is entirely possible. No one's going to lose a penny.

Right. I think that's, and even, you know, Carlo, you kind of gave. Oh, they're going to lose money. Yeah, Carlo, you gave the Luna example. The corollary, I've seen, been seeing most often was people using FTT. Obviously, FTX is token as collateral or FTX using FTT as collateral, which I think, I'm not saying there's anything criminal here. I'm just saying it's, I think it's a better sort of comparison. I mean, just so people understand what happened here, I guess in the TLDR, like layman's terms, is that there's a protocol called Dolomite, a lending borrowing protocol, and the

founder of that is on the advisory board of World Liberty Financial. World Liberty Financial has been moving billions of tokens to Dolomite and taking out loans against it in USCC and USDA 1. And we've seen that those tokens, the stable coins have been moved to Coinbase Prime. That can be for custody, for liquidation. We don't want to get into, I guess, the speculation on what that's being used for. But the bottom line here is that they're taking a token that they created. that still has 80% locked, and the early investors actually have not gotten a roadmap yet for when those will be unlocked. So there's been an entire other controversy there. It's a governance token,

but to a large degree, it favors insiders. We've known that from the beginning. And this is basically a circular economy for free money for them as long as the music doesn't stop. And when World Liberty Financial responded, which they did with effectively, like the most gratuitous chat GPT AI slop response that you've ever seen, which just seemed odd. They basically said, this is how it's designed. We have a platform where people are earning exceptionally high yields, and that's because we are the main borrower,

and we're creating those yields. And there's no liquidation risk because if price or more Liberty Financial goes down, we'll just add more collateral, right? And that's just kind of a scary assessment coming from them. And then they went on to say how USD1, which by the way, should be completely unrelated, is great for the agenetic economy and all these things. It just sounded like we got a whole lot of the normal things that you would hear from someone, but that they didn't quite understand.

I mean, if World Liberty Financial goes to zero, obviously, there's a major issue. There is a point at which you can't add more collateral if it drops too much in price. And those are tokens, much like FTT was with FTCX, that they created. control that they're going to create. And so this pool that had these tokens, or at least one of them, is basically at 93% collateralized. If you went to one of our friends here who, you know, we have Mauricio from Leden up here all the time, and you went to loan your Bitcoin, you know, to borrow against your Bitcoin and stable coins, they would recommend a 50% LTV or lower, right? And if you start getting at 60, 70, you start to get margin warnings, please add more collateral.

this is getting dangerous. They're 93%. Right? So, I mean, it doesn't take hard math to know that nobody's going to be able to get their money out of that unless World Liberty Financial themselves pay off the loan. So like I said, maybe nothing nefarious here. If you understand that the yield that you're getting, I don't know the rates, 20, 30, 40%, I have no idea, is because they're manufacturing it through financial engineering using their token. Then, Godspeed, you understand the risk and you decide what you want to do. I mean, is that a pretty accurate summary, as I understand it?

Seems accurate to me. Yeah. So that's the issue. So, you know, it's a, Gary, you add your hand up first. Yeah, slightly different conversation. I think I've heard the best idea I've heard in months on this platform. Scott Melker's platform. I don't know who was saying it, but an Epstein coin.

I think there was one already. Dude, I think we all. launch 2.0, okay, because I think that would be, I am quite serious, actually. I think it would be maybe we call it the Epstein class coin. And you build this momentum of people that just get sick and tired of, like somebody said earlier, our regulations are failed. Our country has failed, guys. Like my investment, right? I think Iran already launched that coin. Yeah. Well, anyway, I think it would be a spectacular PR campaign. And it might actually hold value because you can't possibly have this continue

and people now get more and more and more angry. So anyway, that's all I have to say today, gentlemen. Welcome to the free world we live in. Epstein token, too. You heard to hear first. Well, I mean, if all, if 100% of the proceeds are used to fund public service ads or whatnot to try to put pressure on those assholes to release the files, that would actually be good. If people got rich on it, that would not be so good if the question of founders.

But, you know, can we put Pam Bondi's face? Hey, listen, I would fund that token and be willing to lock up my coins for 10 years. Yeah. That's longer than Epstein ended up locked up. Exactly. I think people would buy that to it. Well, we could, we could pivot off of off of this particular topic, but I think that it is an interesting story. And we know, and Carlo's right, you know, in terms of what, what it could do.

Oh, it looks like we lost Carlos, so I can't talk about it. But whatever, you know, I don't know if anyone's noticed, you know, markets continue to grind higher here. As long as oil stays under 100, it seems like you can't keep things down. Bitcoin in particular is, you know, sitting over 73,000 now. And so we're getting very close to that, that mythical 74 level. Or is that the one, is it 74 or 75? the McLaughlin always talked about. 74-ish. Yeah, I mean, 74 is kind of a consensus level because it was a previous high and, you know, it was kind of tested as the low back on the, you know, April tariff shake.

I will continue to say the same thing. As long as if it continues to advance with very low volatility, that is not the kind of place. That is not the place where people are going to lean on a level to short it. Just remember that. So, you know, it's like it changes, chart dynamics change based on how you get there. not only when you get there, right? And people should remember that. I think that matters.

I mean, we don't have any chartists up here right now, but you understand what, well, other than you obviously, Scott. Yeah, I mean, that's the level. There's no question. You can just draw one line on a Bitcoin chart right now. It doesn't mean that, you know, and that doesn't mean to respect them, but, you know, any meaningful move above 74 and staying there for a while, you know, it's kind of a big air gap, as many have pointed out through the rest of the 70s,

because it didn't take long to go down to 74. and break it, right? Yep, no, absolutely right. But I think it is relevant. I mean, we don't have any idea, you know, what the hell is going on geopolitically. I cannot explain, you know, the gas prices staying at these elevated, but not crazy levels. I mean, it's weird, you know, and, you know, Gary said they're managing to keep it right under 100. Yeah, that's, it feels pretty manipulated to me, but I'm not an expert.

What do you think, Gary? You think of manipulation? Well, I'll say I have, you know, I've said multiple times, I don't think there's long-term manipulation going on in markets, but I have completely changed my mind. What is happening is so, it's so obvious someone has a, someone's able to manage this. I don't even know how you can manage it. I would think that you'd have prices moving, you know, 8, 10% a day, dude. Like, this is crazy. I mean, I wouldn't possibly short.

I wouldn't, I wouldn't short crude right here. And I think crude at $100 is a dumb, dumb sale. But, I mean, a dumb sale in that it's too high, but like the whole market seems to be managed. It's very difficult to make a decision on what to do here. And I think that people are finding that. I think that you're seeing that in volumes. You're seeing that in volatility. I mean, it's, we've all been trained as traders to look at, to say that there's a huge causal relationship between uncertainty and volatility, right?

I mean, that's how I learned it. And now we're seeing the inverse. Exactly. Exactly, man. So it is, markets themselves are, are kind of crazy. I mean, but we saw something yet today. I'm actually trying. I wish, I wish we had RAN or someone who is, is into it.

You know, if someone pointed out that we should talk about BitTensor. Now, BitTensor for those who don't know is a number 30 coin, whatever. So it's kind of small. It's an AII token. I own a small piece of it. I've talked about it before, not that I know very much about it. But it looks like one of the, you know, one major player sold $10 million worth of the token, which be given the fact that it's pretty small.

And it dropped, you know, 18% overnight. Boom. And it didn't die, but it dropped 18%. And when you look at that sort of thing, that's the sort of thing that happens in crypto. When those sorts of things happen, if the fundamental, rentals aren't changed, then it's a great buy. If it's the start of an exodus, it's a great sell, and it leaves people saying, well, this isn't what happens. And the point that I'd make is, is liquidity is relative. So it's no different than if a large wallet or a large seller in Bitcoin

sells, it always, that tends to always spark a sell-off. And it's not catastrophic, but it's a sell-off and these things happen. But it's interesting how the crypto market is particularly susceptible to this because of the on-chain nature, people get to see it. Whereas in equity markets, you generally don't find out about it until the quarter afterwards. And then, of course, it sparks the exact same thing. But it is interesting. I mean, I don't know, you know, what people have to make about that in terms of the market. I don't think it's anything particularly surprising, but it does happen. And it is the kind of the dynamic of the market. I don't think there's anything to be done on it on a regulatory basis, but I thought it was an interesting

story. Is anybody care? If not, we'll move on. Dave, Dave, I'm sorry. I didn't understand what the difference was between regular markets and crypto markets. In a regular market, but in a regular market, you would know the volume, right? And to the degree that there's significant volume, you wouldn't know. And sellers driving down the price, but you'd still see significant. There's two things. So in equity markets, It's like I spent most of my career trying to figure out building algorithms to hide what was going on so you could finish what you were doing before it sells. Here's the thing. In the equity world, because you don't have to report sales or meaningful positions until, you know, changes, it depends.

There's differences whether you're a controlling shareholder or not, et cetera. But for the most part, there's always a delay. The delay could be longer if you're not a controlling shareholder. or people will see Bloomberg Holdings update on major funds and that sort of thing. You generally have more than enough time to finish whatever you're selling before the market knows a damn thing. And so what you'll see is some impact as you're selling it because, of course, you can't sell a large position without impact. But you don't have the effect of people looking and saying, oh, look, if that insider sold or that large holder sold, maybe I should sell also. Whereas in crypto, you see that, right, almost immediately.

So if a Satoshi era wallet, one of those 20,000 wallets, moved their Bitcoin to an exchange, that would trigger without any more, without selling a coin, that would trigger the market to drop because people would all want to front run it. And the same thing happens throughout the crypto ecosystem. It's much more transparent. And so a large part, so I'm doing, I'm actually moderating a panel, and there are two panels at our Security Traders Association Conference of the New York Stock

Exchange on Monday on moderating one. And we're talking a little bit about differences in market structure between, you know, tokens and non. And one of the points that people are making is that the tokenized market structure is too transparent and causes front running and more impact. And this is a perfect example of that. That's all I was saying. Does that make sense, Liv?

Not really, it wasn't like a special wallet, like the Satoshi era wallets, right? This was just some random wallet that had $10 million worth of town. No, no, it was. People knew it belonged to Covenant AI's founder, but they knew. Ah, okay, so it belonged to somebody and somebody is out or somebody's told 1% of their hold. It belongs to somebody and that somebody then commented about it. Ah, okay. Right.

And so that, that matter. But the point is, there's more, everyone, is trained to think transparency is always good. And in general, certainly it is. But there's certain circumstances where transparency before the fact versus transparency after the fact matters. That's all. And that's something that people are trying to come to grips with

with the whole rush toward tokenization, right? Because there's good to quote someone on the panel, better, cheaper, faster is great, but there's certain issues. And this is just one of those issues. That's all I was pointing out. And you think that this is, I'm saying, it seems that this transparency, I mean, there was, the information is going to be out there eventually. If it was public, right, they'd have had to file.

So the only difference is the timing of when we know. That's right. And it seems the earlier we know, the better. You could make that argument. And I don't disagree necessarily. I don't have an opinion. I'm just reporting the facts. I'm just saying that we in the crypto world.

Is there an argument for the other side? Well, for the later. I'll tell you the argument for the other side. The argument for the other side is if somebody is trying to acquire a controlling stake in a company, they don't want to disclose that fact until they have to because this price will go higher. Right, but that's better or worse for the individual, but I'm talking about for the markets. Well, I don't know.

I mean, you know, to traders who are looking for a quick buck able to front run large institutions, is that good or bad societally? It's an interesting question. I don't know how you want to consider the answer. Generally speaking, I think that markets will evolve no matter how you do it, markets will evolve differently. So if in fact everything on chain is seen and everything has to be on chain, you're going to see omnibus accounts spring up and things spring up that are neutral. Like if every time you move coins to an exchange, for example, or an exchange wallet, you were selling them, yeah, that's impossible. but if coins were just kept there specifically so people couldn't tell, that's where you'd end up with. You'd end up with a lot.

Because markets exist. Like people like talking about dark pools. I mean, I helped invent a couple of them, right? And, you know, people say, oh, my God, these things are terrible because they obviously. But the reason they exist is specifically so that companies that are either buying or selling, it doesn't matter, can hide what they're doing until after they've done it so that they don't have to, you know, allow. it doesn't cost them extra money. And so all this stuff is happening. It's just it, it's, I'm a geek when it comes to some market structure. I admit that. But I do think it's important because it's, there are lots of trends and lots of things happening that are making the markets quote

mature unquote. But, you know, it, as these things get, get hashed out, it will undeniably be good for liquidity. It's just a question of, you know, when I see these things, it's like, okay, it's interesting and people should know what it is. Honestly, I don't think it's a big story. I just think I think this stuff happens. That's all. But yeah, it's a question of regulation. I mean, Carlo, like, you know, you talk a lot about stable coins.

I mean, do you think as smaller stable coins, you know, evolve that, you know, that the transparency of those, of what's going on under the hood is problematic? I mean, I don't think so, but I think that there could be something. It is, it is in one respect if the fine print of the stable coin issuer has, has potential delays in getting your tokens out in the event of a mass exodus. We saw that to a limited extent with the Silvergate debacle. And there is actually a paper that was written by a couple of Texas professors that talk about. No matter what's in the Genius Act,

You still are liable or at least have exposure in the terms of use of the stable coin. So you really want to read them, especially in the event of a liquidity crunch, where people are trying to all get their stable coins out at once and they can't. Okay. Scott, you want to pivot to one of the other stories? I'm so fascinated with World Liberty Financial that I'm still reading about it as we're talking. It's a pretty astounding. I hope, guys, I hope they come out with a statement soon.

and clarify what the hell is going on here. They did. I don't know. They did. What does it say? You know what? Let me find their tweet. This will make life a lot easier.

Because that's important. I mean, they need to come out and get in front of this, especially what they just talked about. It was horrid. It was horrid AI slop. I'm going to find it. But I mean, you know, like how chat, TEPT, like the dashes it uses and the, it's pretty bad. I'm just trying to find the actual account. So one second.

And that's not it. Do you guys keep... The other thing that's interesting to talk about, Dave, while Scott's looking at that is this threat vector that caused this emergency meeting with Fed and Treasury and the financial sector about what this new anthropic release may do as far as exposing threats within these finance protocols. Yeah, let's move for that in a second. I got this thread. Should I just read it? It's worth reading, honestly. Who it says for World Liberty Financial.

Let's talk about the FUD going around our WLFI markets lending position. It's wrong. Here's what's actually happening. Why the real story is a lot more interesting. Holy chat, TPC. We're one of the largest suppliers and borrowers on WLFI markets. So they're admitting it right there. Yes, we supplied World Liberty Financial as collateral and borrowed stable coins.

No, we are nowhere near liquidation. And frankly, even if markets move dramatically against us, we'd simply supply more collateral. That's not a risk. That's how this works. Here's what the flood crowd is missing entirely. By being the anchor borrower, we're generating the yield that makes World Liberty Financial markets compelling for everyone else. Everyday users are earning outsized stable coin yields right now at a time when traditional markets are offering very little. That's the whole point. Numbers matter. Let's get into them. USD-1 is currently at a 159.5 million annual revenue run rate,

quiet, compounding, accelerating. My God, the three words from chat, GBT. But World Liberty I don't understand how USD-1 has anything to do with it, by the way, but we'll keep going. Over the last six months, we have bought back 435,000, 301,34 WLFI tokens at an average price of 15 cents, totaling 65 million in open market purchases, not because we had to, because we believe in where this is going. For early token holders, a governance proposal to unlock lock tokens will be posted to the forum next week for community input and we'll go to a formal vote shortly after. This is the project showing up for the people who showed up first. Now, mind you, 80% are locked and people don't know when they're going to be unlocked and that's their response

to that. Okay, I'm not going to even go into this whole USDA1 tweet that they have as part of it and how it's going to be used in the agentic, near native with gas. Putting fud in the first sentence real quick. Yeah, it's so bad, so bad. Yeah, it's like Carolyn Ellison saying, I'll buy all of the FTT got $0.22 or whatever it was. So to recap, no liquidation risk, users earning exceptional stable coin yields, $65 million in token buybacks, governance proposal incoming to unlock lock tokens for early holders,

USC won built for the agenic economy. The critics are looking at the wrong thing. We're building something they compound. Yeah, that's, as I said in my summary before, as I said in my summary before, we are using our own tokens to manufacture a high yield for customers. that's it, right? They're saying it.

What am I missing here as to how this is not wild? I don't think it went through the legal department. I don't think they have a legal department. Well, you know, it's, it's, I find this funny. I mean, I told you, Scott, actually, I sent it to you. I hope you got it. I started. I've written a manuscript, the, the, I forgot, chapter seven.

is called Adventures in Compliance. And one of the points in the book that people will know is that the reason you have compliance and legal departments is to draw the line so that you know as a business person where to go so that you don't go over the lines, right? I mean, it's kind of important. But in crypto, there are no lines. You're trying to predict future lines. So there's two ways you can handle that.

Well, a way you can handle it, number one, which is how the most legacy firms are handling. it is saying, oh, wait a bit, I don't know where the lines are. I'm not stepping in the pool at all, or I'm going to keep it really small. Where you handle it, number two, is guess where you think the lines are going to go and have a legal department that's kind of trying to interpret that. I mean, Carlo, that's probably your practice is for handling people who do the second thing, right? You know, whether or not WLFI thinks that they're, that, you know, that they can take it. I'm sure they have some legal advice. I'm sure their legal advice, however, is what we will call on the aggressive side. And so I think that's what it is.

but it is interesting, right? Carly, surely you care about it. Surely you have an opinion upon that. Yeah, I do. I mean, obviously, you want to have this strategy and your boundaries laid out at the design of the token. So you're not putting out last minute slop with FUD in the first sentence. Let's dispel the FUD is not exactly the way you want to portray your compliance mechanism. I just don't think that that's a good, that's a good strategy. Yeah, generally when you use the word fud, it's, I try to be careful about that. I think like quantum is not quantum fud. I mean, there is fear uncertainty and doubt.

So I guess to some degree that's true. But we have used that word, that, that new word, fud, to imply that it's not true, right? Imply that it's well understood that it's not true. And when you, there's no way that applies in this case. Sorry. I mean, you know, it's just it is interesting to say, so I think you're right there. I mean, but the thing is it's not fud, right? I mean, it's a statement of exactly what they're doing and then they're saying we're doing it. You just shouldn't hear it supported by the on chain data. But they're saying it. We do it. You just shouldn't care because we're doing it on purpose. That's what they're saying. So the answer isn't there's a lot of fud out there. Their answer is there's reporting out there. It's accurate. It doesn't matter. That's very different than saying it's fud. They're saying, listen, This is not a big deal. If you are getting your yield, you're still getting your yield. Your funds are safe.

Don't worry about it. It's fine. You know, this is how it was designed to act. I mean, that's not, but once you use the word fud in your response, that's how you know it's AI slop, it also shows that there's someone who doesn't have a fucking clue. And it's given off some serious FTX vibes. Yeah. Well, that's right.

And why is it? It's giving off the serious FTX because of the way they're expressing it. I mean, it is what it is, right? You know, you're, you participate in a platform, you're getting yield. If you read the fine print, you would know that there is a reasonable chance that you won't be able to, you'll be frozen from withdrawals at times. It doesn't mean your money's lost, but it means your money is stuck there. You could get gated.

It's like when you buy into private credit, you knew there was a chance that you knew there were gates and how much you could withdraw and you knew there's a chance you could get gated. Now, people don't like to believe it, but we, you know, seen that played out in real time. No one's calling Blue Owl a fraud. They're saying, okay, maybe it wasn't a great investment. They're not calling it fraud, though. But it's more akin to that than anything else, don't you think? So I guess the post-mortem on this is going to be in the terms of use. To the extent there are any, yeah, that's right. Exactly. I mean, if you're backloading the terms of use and saying you knew what you were getting into, but there aren't actually terms of

use on the front end, and yeah, it goes back to the very premise of the whole conversation. Yeah, I think that's true. I think that's true. Scott, you still reading? Largely, yes, I literally am. I'm trying to find more dadics. I've actually been diving, now have been diving into the wallets. What I'm trying to figure out is unclear.

I've literally done like a super deep dive with my open claw since like 4.30 in the morning when I woke up to it. I find it fascinating. But is trying to figure out, super nerd, is trying to figure out what the tokens, where the tokens that are being used as collateral are coming from as far as which wallets and because the place where I doubt they're doing it but the place where this would really cross over is if like those locked tokens that the 80% that people are waiting for are being used as collateral

in the lending protocol yeah I think the interesting thing would be to understand why the people who are investing in WLFI are investing in it right are the investing in the investment to get a return or are they getting other benefits than the financial return? Well, are you talking about your average retail person who bought the pre-sale? Or you're talking about the insiders that... I don't know who's buying it, right? Why would anybody buy it? Right?

Everybody on here has got to be questioning. The day that Tara Luna collapsed, I was... I actually went on CNBC. And the very first question they asked me was, was Terraluna a Ponzi scheme? And I responded, absolutely not. I said, Terraluna was a Ponzi strategy. If you went in and read the code, you would understand what it did. And in my view, if people want to invest in a Ponzi strategy, they should be allowed to.

But I'm certainly not going to. And I don't know who's investing in these things, right? If they're a Trump fan and they're investing it for that reason, then maybe they're not even unhappy about it. Maybe they're happy that they gave the money to Trump and he used it in good ways. Yeah, I mean, I don't know who's buying the token now. it's gone down massively, right? So I don't know that anybody's buying any tokens at the moment. But if you just look at the comments under this,

it's just all outrage where people are like, okay, cool story, bro, where's my tokens? You know, like, Lou, I mean, you've invested in hundreds of these things. Oh, of course, I'm sure. I'm sure they're outraged. One where like, there's no roadmap to when you're going to get in tokens. Yes, I've been lied to. I've been like to many times.

And I hate the people on the other side. And I hate myself for being. stupid enough to believe them. And that's why I think this is more damaging for the Clarity Act than helpful for the conversation about regulation, because this is what's going to catch fire. It's always the negativity that trends. It's a wild story. Could be.

It is, and obviously it's like, you know, you're going to need time to go down the rabbit hole and figure out, you know, everything about it. But it feels to me like a feature, not a bug. And it was there. and whether or not the people who invested new is very, very, you know, up to debate. I mean, look, I will keep pointing it out. I will say this until I turn blue in the face. But FTT is still trading.

200 million value of, now, as market cap is still, it's under 100 million. Oh, nice. FTT has finally fallen to under $100 million. dollars. Understand that if you're at $100 million, you are close, and you're a stock, you are very close to being included in the Russell 2000. You know, these are considered investable assets. A hundred million dollars for what should have. Doge is $14 billion. And FTT's got to be worth more than Doge by your account.

Hey, it's one pardon away from Mooney. It's one pardon away from. mooning. No, it's not. Exactly. That's what people think, but it's not. FTT. Yeah, I'm joking. I'm joking, to be clear. No, no, but it's important. People are dumb. Look, I've seen this many times, you know, when I was running two Sigma securities, often company. But are the people investing in Doge dumb? That's a, that's a matter of, of opinion, right? You know, you can, Doge is one of those things. It's one Elon Musk tweet, accepting it as the payment vehicle inside his entire company, that, you know, and that's what people still are hanging their hat on as memes,

that there's a way, you know, that it could, you know, that, look, Doge actually has a blockchain behind it, right? I mean, you know, it's not, it's not, it's not, it's not sitting on Salana, right? It's not just pure meme. I'm not, look, I don't own any, right? Or if I do, it's in, some snippet in some, like, dead wallet that I, you know, that I don't really care. give a shit about. You know, it's like we all have, we all have the crumbs that fell behind, the coins

that fell behind the couch cushions, you know, but the truth is that that it's an inapt comparison. I mean, FTT is a remnant. It's an ep comparison. It's an ep comparison. All I'm saying, Dave, is that people should be allowed to invest in what they want to invest in. I've never said they should. But why are you looking down and calling people who invests in FTT stupid? Because they're calling them stupid because they're stupid okay because there's no terminal state there's no terminal state of FTT FTT's entire purpose it was around an exchange that will never come back that is gone gone look I'm not I'm not invested it all I'm saying I've called lots of people stupid who ended up

not being so stupid so I stopped oh I didn't say that you can't make money trading things that are absolutely worthless and when the music stop as long as you're not holding it when the music stops what I'm saying about FTT is is unlike memes, unless you're saying that the FDT token is some sort of weird meme that people will pay for because they want to own something that reminds them of the worst bank, you know, of the worst fraud in crypto history. I mean, I guess, you know, but I think of it differently. So maybe here's my experience. My experience is in watching companies that are going bankrupt, getting delisted,

knowing the bankruptcy court is going to wipe out the equity shareholders when it's finally concluded and getting bid up and down, up and down, up and down into the hundreds of millions because of various news stories so people don't understand. And I've seen that. In tokens, there's no bankruptcy court, right? You know, these things live on as zombie assets. That's the difference. Whereas in equities, equity class is literally wiped out at some form in bankruptcy. And so that's the difference here.

But that's why we have so many zombie things in the crypto world because there's no cost to maintaining it. company you want to maintain stock you it costs you every year and when you're not paying it it goes poof there's nothing that does that in crypto and so yeah maybe you're right car you know maybe you're right lo maybe you're right maybe the answer is it becomes when they go to zombie it becomes a meme and if people want to own it for some inexplicable reason they should be able to do so of course they should i never i'm not saying they shouldn't but i'm saying it is it does but a hundred million dollars a lot for something that will never exist that's all that's all i'm trying to say But I hear your point.

It makes sense. And I hear yours. Right. So that's where we're at. So we have world liberty. We have, you know, we have markets kind of not knowing which way is up. We have Bitcoin performing relatively well correlated with silver continually. You know, there were a few other stories.

I lost what I wanted to talk about. I mean, I guess that's probably my fault. Yeah. No, no, it's okay. You know, where else? There's some big news in Japan, by the way, that crypto will be treated as a financial asset rather than just payment rails.

It reduces, I think it was 55% was their taxes to a flat rate of 20% like other assets and gives the same disclosures and all the things around crypto that they have for the rest of their financial markets. It's kind of big story in a major economy. Is that the same as the Metaplanet tax treatment? because that'll put pressure on Metaplanet, right? That's actually, I didn't think about that,

but the reason people were buying Metaplanet was to avoid that tax, you're correct? Absolutely. Yeah, Metaplanet. I thought exactly the same thing, Gary. That's exactly where my brain was going. I wish I don't know the answer, but I think you're absolutely right. But that is interesting. I mean, I did have a conversation with a reporter the other day,

and he was asking me about, you know, the difference between, you know, paper products. And I said most of the paper products that exist. exist for one of two reasons. One is going to disappear and the other is going to stay. The disappearing is pure access or getting around, you know, getting around legal or tax implications of native crypto. And Metaplanet is being, is one of those, the most obvious examples of that. And as those things normalize, those products eventually, you know, any premium goes out of it. That, that's, so I think it is important to understand that, you know, when you're buying those products. I mean, the other reason is, if new financial primitives could be created, if you can actually create money, if you can actually

create value by utilizing the crypto in this product. And that's what strategy is trying to do with digital credit. And I don't want to, we could go down that rabbit hole if anyone really cares. But because every day we still see, you know, there there is weird fud about strategy. And there's also weird cheerleading. You know, it's, it's always been in my mind in between the two extremes. You know, I don't think there's a, there's this, there's no such thing as a perpetual money glitch or infinite flywheel or any other crap. That's nonsense. And there is a limit to how much you can, you can borrow based off of your Bitcoin or, or there's a limit to how much you could continue to buy based upon, you know, people's desire to get yield when you're paying above market yield. I mean, I don't think that it's, it's right on either side.

I mean, Scott, are you tired of that story? But it's a big story. Yeah. STRC is continuing to buy more, is allow them to buy more than is being mined. And so that's the one way more market. But that's important. We used to actually think it mattered mining supply. Now, imagine when all the miners that have bought in the past or have, you know,

sold out what they have in their pivot to AI are done, you can't tell me that having a tap from the fixed income markets that is creating a natural upward bias in the price isn't going to show up in the price. I'm sorry, but it will. Right? Yeah, I mean, it's, it's the biggest story if you can assume or extrapolate for that STRC will continue to be this popular or grow. Because you, we don't know where the fixed supply is coming from, but this is basically a floor of demand that you can actually take a transparent look at every single day, even if nobody else bought anything. I mean, I got to tell you, that product, I just moved a chunk of money into STRC because I am confused right now as to what the market's going to do.

And I was like, okay, I could buy Bitcoin at 68 or I could put it in the STRC and get some yielded monthly. That's very interesting, right, that I can come and go. I can use it as a sweep account. And, I mean, it was a chunk of money. and I feel very comfortable with it sitting there until I can figure out what the heck this market's doing. I did the same thing, Gary. Yeah, dude. I did the same thing, Gary.

I had a couple of companies the other day. I'm like, you guys should be sweeping your cash into SCRC, dude. Like, these people are making 2% on their corporate funds, and the guy was like, wow, I didn't know I could do that. These are really smart people, too. And I think there's a ton of cash sitting in corporate accounts. accounts, small business accounts, two million here, four million there. They're just sitting there dead money, and they just don't know this tools there. Very few bankers know that tools there.

Now, to me, that's a really cool product contrary to why. I think a great question was asked, why would anybody pay eight cents for World Liberty Financial? What do they do? Like, I don't understand any of these businesses, other than it's a political contribution. And hey, I'm on the Trump token was supposed to be, though, right? Yeah. Oh, yeah. How many are there?

Clubs within clubs. Yeah. It doesn't make much sense when you look at it. Dave, I mean, it's the same question every time. Every time I interview someone who is, you know, a founder or a president, I get a text from you that says, ask him how the value accrues to the token holder. I'm sorry. It would be a broken record.

No, it's so valid. It is the question. And, you know, it is, it's maddening, you know, because, look, the biggest thing, what, ask yourself what happens? What happens to the notion of tokens if startups have a route to be able to get instant liquidity for equity in the startup? Ask yourself what would happen. And if you can't, if you're, if you can't justify the token as an, as an asset or a methodology other than equity, and you took the legal out of it, and you said, okay, I want to be able to get instant funding so that I can fund my project based off of an idea and get an, and attract a wide pool of initial investment. And that's my reason for launching a token. If you're able to do that for equity, what investor would buy a token instead of equity? at that point. And I think the answer in the vast majority of cases is they wouldn't. And so that tells you something, right? Now, if the token itself has equity features, meaning it provides you, you know,

a clear percentage of revenue or whatever, even if it doesn't provide ownership, because, you know, look, the equity world, people ignore the fact that, you know, and everyone points to Zuckerberg, but it's not just him, you know, the equity world has voting right shares and, non-voting shares. Well, if tokens effectively become non-voting shares, because they don't give you any part of the capital structure, but they do give you a right to dissolution value and or revenue, then, yeah, you know, people would buy tokens and that's fine. But the problem is when you have a token, and there's always the first question I ask is, why is there a token? Oh, well, we need it for, no, be honest. And you get the honest as we need immediate liquidity. That's what you get.

Right. That's what happened. I mean, I wish there were other, I wish Gorov was up here today because he would. Well, it's fine. We ran right into time and you made a great point. So, you know, we've unpacked that. Well, also, Dave, it's not just liquidity, though. It's that they're able to bypass the regulatory thresholds that, you know, takes a year, cost you $10 million to get one of these comments minimally. But the answer to that should be fix it.

I mean, Lou is 100% right. We have a lot of regulation that is designed to do nothing other than enrich people involved in the process with the effect of blocking people from doing what they should legally be allowed to do. Right? Do I get that right, Lou? Step out. But it's a perfect, we can wrap. I think we unpacked it all.

Have a great weekend, everyone. Yeah, everybody have an amazing weekend. We'll talk to you on Monday. Thanks, Dave. Thank you, guys. Take care. Ciao.