Trumps Crypto Project Sends Proposal to Ethereums DeFi Powerhouse Aave

Former President Donald Trump’s long-rumored decentralized finance (DeFi) project is slowly coming together, with more details coming to light today.
On Wednesday, World Liberty Financial submitted a proposal to the governance forum of Ethereum DeFi platform Aave, upon which Trump and his business partners intend to build their crypto offering.
The project proposes launching its services as an instance on Aave, meaning that Aave would provide the infrastructure for World Liberty to function. In return, AaveDAO, the group of Aave token holders that govern the platform, would receive 20% of all protocol fees generated by World Liberty and 7% of the supply of WLFI, the project’s governance token.
While WLFI was initially described as “non-transferrable,” the proposal states that users will receive the token as a reward for participating in World Liberty liquidity pools. It’s uncertain how the project will allow AaveDAO to take custody of WLFI tokens and distribute them to users if the tokens are indeed non-transferrable. Representatives for World Liberty Financial did not immediately respond to Decrypt’s request for comment.
AaveDAO community members will now discuss the proposal and decide whether to allow Trump and his associates to build their DeFi offering on Aave’s decentralized lending protocol. Holders of WLFI would also need to separately approve the plan.
The proposal also reveals that World Liberty will initially allow deposits in Ethereum (ETH), Wrapped Bitcoin (WBTC), and the stablecoins USDC and USDT. The project aims to provide stablecoin liquidity for ETH and WBTC, with a focus on attracting first-time DeFi users who may be familiar with the Trump brand but less familiar with liquidity pools and digital asset borrowing.
Last month, Trump and several associates, including his sons Eric and Don Jr., and fellow New York billionaire Steve Witkoff, announced World Liberty, which will offer borrowing and lending services for cryptocurrencies on the Ethereum blockchain network, similar to existing DeFi applications like Aave.
The World Liberty team has emphasized that their project is a more “user-friendly” alternative to existing DeFi options like Aave, which can be challenging to navigate without technical know-how. In their pitch to AaveDAO members, World Liberty’s team promised to bring a significant number of new users and liquidity to Aave.
Many aspects of World Liberty remain unknown, such as how and where it will function. In late September, the project opened whitelists for select Americans, limited to accredited investors, to purchase WLFI tokens. The tokens will be offered under a U.S. Securities and Exchange Commission (SEC) rule that restricts participation to wealthy or knowledgeable investors to mitigate risk.
Questions have lingered about the World Liberty Aave instance itself, should it gain approval and launch. Previously, the World Liberty team stated that their platform would be available to all Americans “in the future.”
However, the project’s team confirmed to Decrypt that the proposed World Liberty Aave instance would be accessible to all Aave users, including Americans.
This plan is not without risks. Other U.S.-based DeFi protocols, like Uniswap, have received notices in recent months that the SEC plans to sue them for allegedly offering illegally unregistered securities.