WLFI invests ¥120 billion to expand USD1 stablecoin

👋 Everyone who is holding on, are you still breathing?

The world of virtual currency is still a roller coaster ride!World Liberty Financial (WLFI)But from their own treasuryApproximately 120 billion yenWe delve into the news of a proposal to allocate a significant portion of the proceeds to the expansion of the USD1 stablecoin. As the market becomes increasingly competitive, it will be interesting to see how this move will help USD1 grow. In conclusion, this plan, which will be decided by WLFI's governance vote, aims to boost USD1 adoption in DeFi and CeFi. The background to this is that competition in the stablecoin market is fierce, and WLFI is trying to maintain momentum by utilizing its treasury. (Approximately 250 characters)

World Liberty Financial's Treasury Distribution Plan Supports USD1 Stablecoin

Background and Issues

Okay, let's pretend we're sitting at a cafe and talk. The cryptocurrency stablecoin market has been really lively recently. Big names like USDT and USDC are dominating, but newcomers are also appearing one after another.Intensifying competitionI am.

Imagine this: stablecoins are like your everyday wallet. Their value is pegged to the dollar, making them a "safe haven" in times of volatility. But if everyone rushes into the same safe haven, it becomes crowded and difficult to use. That's the problem right now.

WLFI's USD1 is a hot topic due to its connection to the Trump family, but it is difficult to increase market share. They are using treasury (project's fund) to provide incentives and are trying to get it used in DeFi (decentralized finance) and CeFi (centralized finance).

To put it in perspective, it's like your favorite cafe running a "free drink for new customers" campaign to increase the number of regulars. However, because funds are not unlimited, you need to be careful and only use 5% of your treasury. The challenge is to stay ahead of your competitors.sustainable growthIt's a joke, but the competition for stablecoins is like a "dollar-fixed game of musical chairs," and coins that don't get a seat might disappear from the market. (laughs)

Additionally, there are significant regulatory hurdles. Japan has strict regulations regarding cryptocurrencies, and using overseas projects runs the risk of being outside of legal protection. As always, proceed with caution.

The core of the technology

Now, let's get to the nitty gritty. WLFI's proposal is to allocate funds from the treasury to expand the supply of USD1. In tokenomics terms, the key is governance, which is decided by voting by WLFI holders.

To break down how stablecoins work, USD1 isPegged to $1This means that its value is stable, just like savings in a bank. It is backed by low-risk assets such as US Treasuries and dollar deposits, and is guaranteed 1:1.

To put it in perspective, stablecoins are like a "fixed-rate exchange" compared to the volatility of cryptocurrencies that can suddenly double your pocket money. Treasury allocations act as a "promotional budget" to expand that exchange.

I'm going to humorously say that if this fails, it might be like a "big treasury-emptying bargain sale" (lol), but seriously, the proposal is to distribute 5% of the funds as an incentive to CeFi and DeFi platforms, with the aim of increasing liquidity and increasing the circulation of USD1.

Looking at this table, you can see that it is more aggressive than before, but also that the risks are increasing. Technically, funds are distributed using smart contracts on the blockchain. For beginners, it is as simple as "put money into a vending machine and get a drink."

Applications and Market Impact

Let's look at how this technology can be put to use. From a user perspective, if USD1 becomes easier to use in DeFi, lending, borrowing, and trading will become smoother.

For example, if you are farming (earning yields) in DeFi, increasing the liquidity of USD1 will lower fees and make your life stress-free. It will be as comfortable as driving on an "uncongested highway."

From a developer's perspective, USD1 can be deployed on blockchains like the Canton Network. This could lead to widespread on-chain payments for institutional investors. The impact on the market is that the total stablecoin market size will expand further. As competition increases, WLFI's growing market share will boost innovation overall.

I'm joking, but if this works, "Trump's Magic Dollar" might take over the cryptocurrency world? (laughs) But the market is unpredictable. On the positive side, the impact of increasing the accessibility of DeFi will be huge.

Meanwhile, on the CeFi side, traders will be pleased with increased liquidity on exchanges, which will help the crypto ecosystem mature as a whole.

Actions by level

Let's take action! But I'm not talking about buying, I'm talking about deepening our understanding.

Beginner: First, learn the basics of stablecoins. Try using something like USDC in your wallet and get a feel for the stability of its value. Next, read the proposal on the WLFI official website.

Intermediate: Test USD1 on a DeFi app. Add it to a liquidity pool and experience the incentives. Keep an eye on gas fees.

If you live in Japan, please remember that there are risks outside of legal protection when using overseas platforms. Start with a simulation. To put it humourously, it's like learning safely through a game tutorial before playing.

Future prospects and risks

The future may be bright? If WLFI's plan goes through, the market cap of USD 1Over $20 billionIt will continue to grow and global adoption will accelerate the innovation of DeFi.

According to the roadmap, after the governance vote, full-scale fund distribution will likely begin in 2026. Collaboration with the Canton Network is expected to expand on-chain financing for institutions.

However, don't forget about the risks. Technically, there's the risk of the peg collapsing (value deviating from $1) or smart contract bugs. Legally, there's the possibility that regulatory changes could halt the project. In Japan, you need to comply with the Virtual Currency Act.

One operational risk is running out of funds due to excessive use of treasury funds. Just kidding, but try to avoid mistakes like "spending all your pocket money on sweets." Look at the risks objectively and make a balanced decision.

My Feelings, Then and Now

Wasn't it interesting to see how USD1 will change with WLFI's treasury distribution? We've looked at it objectively, from the technical details to the risks.

The important thing is DYOR (Do Your Own Research). Research and make your own decisions. Cryptocurrency is exciting, but be careful. Did you have fun learning like on Cafetalk?

👨‍💻 Author: SnowJon (WEB3/AI Practitioner/Investor)

Based on the knowledge I gained from the University of Tokyo's Blockchain Innovation Course,
Researches and disseminates information on WEB3 and AI technology from a practical perspective.
We place importance on translating difficult technologies into a form that can be understood.

*AI is used as an auxiliary tool, and the author is responsible for final confirmation and responsibility of the content.

Reference links and sources

• Original news: World Liberty Financial Treasury Allocation
• Coinpedia: WLFI's 120M Treasury Proposal
• CoinDesk: Leveraging Treasury to Grow USD1
• PRNewswire: Canton Network and USD1 Collaborate