World Liberty Financial’s native token, WLFI, declined 1.0% over the past 24 hours to trade at $0.168, lagging behind the broader cryptocurrency market, which saw Bitcoin dominance inch up by 0.09%. The dip reflects mounting headwinds stemming from political controversy, constrained utility within its own ecosystem, and deteriorating technical indicators—all converging to erode investor confidence.
The regulatory environment surrounding WLFI has grown increasingly hostile. A group of Democratic lawmakers, spearheaded by Representative Maxine Waters, recently accused the U.S. Securities and Exchange Commission (SEC) of halting enforcement actions against Justin Sun—founder of Tron and a key figure in WLFI’s development—in exchange for his $75 million investment in the project. Dubbed a “pay-to-play scheme,” this allegation has thrust WLFI into the crosshairs of political scrutiny, raising serious questions about its regulatory viability. Such controversy not only jeopardizes ongoing initiatives like its application for a banking charter but also invites potential delays or heightened oversight that could deter institutional participation.
Compounding these concerns is the limited functional role of the WLFI token within its newly launched WLFI Markets platform, which went live on January 12. Despite initial expectations, on-chain data reveals that WLFI can only be used as collateral and cannot be lent, borrowed, or deployed to generate yield—effectively offering 0% return to holders. In a DeFi landscape where token utility often drives demand, this structural limitation undermines core incentives for long-term holding. Without mechanisms to accrue value through staking, lending, or governance participation, the token lacks the economic flywheel necessary to sustain price appreciation. Although community governance could theoretically unlock new functionalities, no such proposals are currently scheduled, leaving investors with little near-term catalyst for optimism.
From a technical standpoint, the picture remains equally unconvincing. The MACD indicator has registered a bearish crossover, with its histogram dipping to -0.000403, while the Relative Strength Index (RSI) hovers at a tepid 51.7—unable to break above the 55 threshold that might signal renewed buying interest. Price action further confirms weakness, as WLFI trades below its 7-day simple moving average of $0.171. Should the token breach the $0.165 support level, it could trigger a wave of stop-loss selling and accelerate downward momentum.
While World Liberty Financial’s USD1 stablecoin continues to gain traction—now boasting a $3.4 billion market cap and representing a significant long-term asset—the WLFI token itself remains disconnected from this success. Without urgent reforms to its tokenomics, particularly the introduction of yield-generating mechanisms through governance, the token risks becoming an afterthought in its own ecosystem. Market participants are now watching closely: if no concrete steps are taken before January 20 to restore utility and confidence, the sell-off may deepen.
Source:: WLFI Loses Ground: Political Scrutiny Meets Technical Weakness and Tokenomics Flaws