Image CCO via U.S. Government
In a significant move for the cryptocurrency landscape, World Liberty Financial has submitted a proposal to the governance forum of Ethereum’s DeFi platform Aave. This initiative, backed by former President Donald Trump and a number of notable business figures, will establish a new decentralized finance (DeFi) project that could bring a new generation of cryptocurrency users into the marketplace
What’s World Liberty Financial all about?
World Liberty Financial will offer decentralized finance (DeFi) services. DeFi is how we describe an application or protocol that offers financial services like lending, banking and investing directly to users. In other words, without intermediary institutions (also known as banks).
What does DeFi do?
- Provides alternative financial services, including:
- Lending: Platforms connect borrowers and lenders directly, eliminating intermediaries and reducing costs
- Investing: Users can invest in decentralized assets, such as tokens, and earn returns
- Banking: DeFi protocols provide deposit, withdrawal, and transfer services, like a traditional bank
- Democratizes finance by:
- Removing intermediaries: Cutting out middle-men means reducing fees, lowering friction (less paperwork!) and increasing transparency
- Peer-to-peer relationships: Allowing individuals to interact directly, without relying on intermediaries
- Uses cryptocurrency and blockchain technology: To facilitate secure, decentralized, and transparent transactions
Obviously, there’s a ton of money to be made in replacing banks, brokerage houses, trading firms and mortgage originators – otherwise there wouldn’t be so many of them. Ultimately, the goal of DeFi is to return the profits currently going into bankers’ pockets to the customers.
It’s a noble goal!
And it’s a financially savvy move…
World Liberty Financial will base its services on the Ethereum-based DeFi platform Aave, which already offers the infrastructure to provide borrowing and lending services for cryptocurrencies. This collaboration underscores a growing trend of integrating traditional business acumen with cutting-edge blockchain technology.
World Liberty Financial will be an Autonomous Decentralized Organization (DAO) – instead of a board of directors, owners of the project’s governance token (WLFI) will vote on decisions. Owning WLFI gives individuals not just a stake in the project, but a voice in the project’s direction.
That’s just the way DAOs work – what’s most exciting here is the potential for Trump’s loyal supporters to get involved in crypto…
A focus on new users from an untapped demographic
World Liberty aims to attract first-time DeFi users by offering a more accessible platform and a user-friendly interface. Those first-time users, in my mind, are the 63 million Americans who voted for Trump in 2016 – and the 74 million who voted in 2020. Demographically, they represent a massively underserved audience unfamiliar with DeFi.
I’m betting that, even if they think crypto is confusing, they’ll readily learn more about a DeFi project tied to the Trump brand. Whatever your politics, you have to admit the man inspires fierce loyalty among his followers!
By focusing on user-friendly interfaces, the project hopes to draw in those familiar with the Trump brand but new to digital finance.
Soft opening planned
The latest proposal indicates that World Liberty Financial will initially be open to accredited investors only under SEC regulations. “Accredited investors” regularly make $200,000-$300,000 per year or have a net worth of $1 million, and have filled out some paperwork. These folks are 10-15% of the American population – but control at least 75% of the nation’s wealth.
That’s the kind of money that really moves markets… But DeFi isn’t really intended for the wealthy.
World Liberty Financial intends to expand access to all Americans eventually. This ambition aligns with broader efforts to democratize access to digital finance. However, it also means intense scrutiny by the SEC. I think it’s safe to consider this initial phase as a soft launch, a proof-of-concept leading to a properly open and democratic platform.
What’s most interesting is what it tells us about current trends…
Growing acceptance, endorsement and use of crypto technologies
World Liberty’s proposal is part of a larger trend towards mainstream acceptance of cryptocurrency. High-profile involvement in crypto projects signifies a shift in perception, recognizing digital assets as viable investments and financial tools.
This growing acceptance is driven by several factors:
- Institutional Interest: More corporations and financial institutions are investing in cryptocurrency and blockchain technology. We write about this regularly.
- Technological Advancements: Blockchain innovations continue to expand the potential applications of cryptocurrencies across industries – as we discuss quite often.
- Public Awareness: As more people become aware of the benefits and uses of digital assets, interest in crypto as an investment grows. Interest comes before adoption, adoption means growth…
World Liberty Financial’s proposal marks an important step in the evolution of cryptocurrency as a mainstream financial instrument. By bridging traditional business interests with innovative blockchain solutions, it highlights the potential for digital assets to transform personal finance.
DeFi can do this by itself – but DeFi plus the Trump brand is a real game-changer. I’m reminded of last year, when Costco started selling gold bars – and suddenly, everybody had to have one. Or two. (Or ten.) Millennials who’d never had the slightest interest in gold as an asset caught gold fever – and now Costco’s regularly selling over $100 million in gold bars a quarter – and some 80% of stores just can’t keep them in stock.
The lesson here is simple: Investor acceptance is about marketing. Product placement and branding are vital. Consider:
- Costco + gold bars = $100 million/quarter in sales.
- Trump + DeFi = ?
While we can’t solve the second equation (yet!), I’ll bet you a Costco gold bar that it’s eight plus figures at least. We’re talking about millions of Americans going from crypto-skeptic to crypto-curious overnight.
You can’t get involved in the World Liberty Financial project yet. However, you can own AAVE, the governance token of the Aave DeFi protocol. It’s just one of the nearly 20 cryptocurrencies available when you open a digital IRA with us.
Sort of like World Liberty Fiancial, we’re here to offer a secure, user-friendly platform for anyone who understands that crypto is the future of money – or just wants to take advantage of crypto’s massive growth potential and diversification benefits.
When we see flagship projects like this one, we get even more excited about the months ahead of us. I strongly encourage you to embrace the future of finance and explore its possibilities with BitIRA today.
The sooner, the better. (The longer you wait, the more you should expect to pay for your share of the future of money…)
