Summary

Former U.S. President Donald Trump made headlines on October 16 with the launch of his World Liberty Financial (WLFI) token, promising investors a chance to gain voting rights in a future decentralized finance (DeFi) protocol. However, the much-anticipated launch failed to make the splash many expected.

After nearly a full day of trading, the numbers told a disappointing story. As of 10:00 am UTC on October 17, only 848.63 million WLFI tokens (worth $12.7 million based on the presale price) had been sold. That left an enormous 19.1 billion coins unsold, representing a whopping $287 million in unmet expectations. The first-day sales accounted for just 4.24% of the total supply.

But how did a token linked to a figure as notorious as Trump flop so badly? Here are five factors that might explain the underwhelming debut.

1. Limited Access to Buyers

One of the most significant hurdles for the WLFI token was the strict restrictions on who could buy it. Unlike most token presales that are open to the public, Trump’s DeFi token was only available to accredited U.S. investors or non-residents of the United States.

Visitors to the token’s website had to verify whether they met the requirements of an accredited investor, which under U.S. law, means earning over $200,000 annually, having a net worth exceeding $1 million, or holding a senior position at a company issuing unregistered securities. These restrictions eliminated the vast majority of U.S. residents from participating.

Although non-U.S. residents could bypass the accredited investor requirement, they still had to provide proof of residency outside the U.S., further complicating the buying process. This limitation likely alienated a significant portion of Trump’s supporter base, many of whom are U.S.-based and not accredited investors.

2. WLFI is Not Transferable or Tradable

In a surprising departure from typical cryptocurrency behavior, WLFI cannot be transferred from one wallet to another. This means that investors can’t sell or trade the token, cutting off the potential for profit from resale. In fact, the only thing token holders can do is wait for the future DeFi protocol to launch, when they will supposedly be able to vote on governance proposals.

This inability to trade or transfer WLFI discouraged many from participating in the sale. Without the liquidity and speculative opportunities that typically drive cryptocurrency trading, many potential buyers were left questioning the value of holding WLFI.

3. Website Crashes at Launch

Even for the relatively small number of buyers who did want to purchase WLFI, the website couldn’t handle the traffic. Several users reported encountering error messages when trying to buy the token, being met with a frustrating “this page isn’t working” message.

A website crash during a highly publicized launch is never a good look. Potential investors who experienced technical difficulties may have reconsidered their purchase altogether, compounding the token’s lackluster performance.

4. Perceptions of a Grift

Trump’s WLFI token faced criticism even before the sale began. Some observers believed that the project was nothing more than a cash grab, designed to capitalize on Trump’s name without offering genuine value.

Although the non-transferability of the token is stated in the website’s fine print, critics suggested this key detail was buried to push more sales. Trump’s announcement of the token was so controversial on X (formerly Twitter) that it received a community note warning potential buyers that they would be unable to transfer or sell the token.

This skepticism likely contributed to the sluggish sales, as investors hesitated to buy into a project that many saw as dubious.

5. Tedious Buying Process

The final hurdle for WLFI’s launch was the complexity of the purchasing process. Even accredited investors had to pass a Know Your Customer (KYC) check before buying, which required them to upload personal documents such as a passport or driver’s license. For privacy-conscious investors, the requirement to trust a third-party KYC provider, Sumsub, may have been a dealbreaker.

Moreover, some buyers may have been unsure of their status as accredited investors or uncertain about how to navigate the system, especially given the confusing layout of the website. These roadblocks likely discouraged many from completing their purchases, further dampening sales.

What’s Next for Trump’s WLFI?

Despite the dismal first-day sales, Trump’s influence in the U.S. crypto community remains strong. His political action committee raised $7.5 million in crypto donations between July and September 2024, according to the Federal Election Commission. Trump’s political opponent, Vice President Kamala Harris, has also been trying to court crypto voters by promising a balanced regulatory approach.

As for WLFI, the future remains uncertain. While the token may have stumbled out of the gate, Trump’s supporters could rally behind it in the coming months—assuming the DeFi protocol it promises ever materializes.

Until then, the world will be watching to see if this high-profile token launch can rebound from its shaky start.