World Liberty Financial co-founder Zak Folkman defended the project’s roughly $75 million borrowing position on Dolomite Markets, saying the loan was small relative to the collateral posted and was intended to raise utilization on the lending protocol.
In an interview with The Block at Consensus 2026, Folkman said World Liberty had been the largest liquidity supplier on Dolomite before taking what he called “a very, very small loan.” He said the move helped lift activity across the protocol’s markets.
The remarks followed April onchain disclosures showing a World Liberty wallet deposited about 5 billion WLFI tokens into Dolomite, then borrowed about $75 million in USD1 and USDC stablecoins against that collateral. Arkham data later showed that more than $40 million of the borrowed funds moved to Coinbase Prime.
DeFi researchers raised concerns that the WLFI-backed position created concentration and liquidation risk for Dolomite lenders. The concern centers on the size of the collateral pool, the depth of WLFI liquidity, and the effect that any forced unwind could have on lenders exposed to the position.
Large loans backed by project-linked tokens can become harder to assess when collateral liquidity is thin or closely tied to the borrower’s own ecosystem. In that setup, lenders face not only price risk but also governance, disclosure, and counterparty risk.
Large DeFi...
Why Is World Liberty’s Dolomite Borrowing Under Scrutiny? World Liberty Financial co-founder Zak Folkman defended the project’s roughly $75 million borrowing position on Dolomite Markets, saying t...