A contributor to Frax Finance has proposed a governance plan to invest $5 million into World Liberty Financial (WLFI), a DeFi project associated with Donald Trump. The aim is to integrate Frax into WLFI’s ecosystem, enhancing its position in the network.
The proposal includes a provision for an additional $5 million investment, dependent on the performance of the initial $5 million allocation. The project is managed using Frax Shares (FXS) tokens.
“With the newly elected Trump administration’s commitment to US-based DeFi projects, it’s important for FRAX to position itself in its rightful place as a leader in this movement,”
Frax noted.
“As Trump’s only DeFi project, WLFI is the ideal partner to achieve this goal.”
“President Trump has a vision to make the United States the global leader in cryptocurrency, with WLFI a key part of achieving this goal. Approving this investment empowers FRAX to expand adoption, increase visibility, and secure its role in the next phase of US DeFi growth.” He added
A community member raised concerns on the website about the investment in response to the proposal. They argued that allocating $5 million towards a project with a fully diluted valuation of $5 billion without a proven track record was risky and unreasonable. The member pointed out that the high fully diluted valuation (FDV) compared to the current market capitalization suggests a significant risk of future dilution, potentially reducing the token’s value.
Frax, the creator of the decentralized Frax stablecoin and Frax Ether, currently holds a total value locked of $445 million. Meanwhile, WLFI completed its initial token sale, followed by a subsequent offering that resulted in a price increase of 230%. The company sold 20% of its total token supply and, due to high demand, released an additional 5%. The sale raised $300 million, with tokens priced at $0.05 each.
If you want to read more news articles like this, visit DeFi Planet and follow us on Twitter, LinkedIn, Facebook, Instagram, and CoinMarketCap Community.
“Take control of your crypto portfolio with MARKETS PRO, DeFi Planet’s suite of analytics tools.”
