A stablecoin tied to President Donald Trump's family just helped pay out fighter bonuses at a White House UFC event. But that same digital token caused a liquidity crisis for small depositors only months earlier.
On Friday, the UFC announced that World Liberty Financial is funding a $250,000 bonus pool for fighters at UFC Freedom 250, an MMA competition held on the White House's south lawn on Sunday, June 14, which also marks President Donald Trump's 80th birthday. The bonuses, distributed in USD1, were awarded to fighters in seven matches.
Speaking to The Guardian, Todd Phillips - who works as a crypto expert at Klaros Group - said, "Paying the fighters in the USD1 stablecoin would have the same economic function as writing them a check. Announcing to the world they are doing it in USD1 sounds like they are advertising to the world that USD1 is out there and that it is connected to the UFC and the White House."
The DeFi Drama Behind the Glitz
The USD1 stablecoin from World Liberty Financial had a turbulent beginning in 2026. The company borrowed more than $75 million worth of stablecoins from Dolomite, a DeFi lending platform whose co-founder Corey Caplan is an advisor to WLFI; as collateral, it deposited 3 billion WLFI governance tokens and also contributed some of its own USD1 into the arrangement.
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This borrowing caused the USD1 lending pool to hit 93% utilization, which meant that retail depositors who had provided USD1 to the pool in hopes of being able to withdraw freely were blocked from doing so until the loans were settled. WLFI paid back $25 million of the debt, and then created $25 million in new USD1 a few days afterward, actively adjusting the token's supply through April.
Since January 1, the total circulating supply of USD1 has increased from $3.3 billion to approximately $4.6 billion. In his financial disclosure, Trump reports his stake in World Liberty Financial as exceeding $50 million.
World Liberty is also involved in a legal battle with Justin Sun, a crypto magnate and initial purchaser of WLFI governance tokens, who filed a lawsuit against the company, claiming it wrongly froze his assets. The company responded with a countersuit for defamation.
The event underscores the growing integration of Trump-linked crypto ventures into high-profile settings, even as the stablecoin's operational challenges raise questions about its stability and governance. World Liberty's application for a federal banking license could further blur the lines between traditional finance and decentralized finance, particularly given the political backdrop.
What to Watch
World Liberty Financial has applied to the Comptroller of the Currency for a federal banking license. The company's next moves will determine whether its stablecoin stays in the spotlight for the right reasons.
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