Frax Finance wants a $5M claim on Trump-backed WLFI to enhance U.S. DeFi expansion alongside a further $10M investment.
World Liberty Financial (WLFI), a DeFi platform closely linked to Donald Trump’s administration, has received a $5 million investment proposal from Frax Finance.
The move aims to establish FRAX as a leader in the expanding decentralized finance (DeFi) market in the United States. Depending on the partnership’s success, a possible $10 million follow-up investment is also being discussed.
Frax Finance Offer To Invest $5 Million in WLFI
The inauguration of Donald Trump as the 47th President of the United States has increased interest in crypto projects of U.S. origin. The growth of blockchain and cryptocurrencies has piqued the curiosity of the current administration.
One major competitor in this space is World Liberty Financial, a DeFi initiative strongly supporting Trump’s goal of a US-centered cryptocurrency economy.
The algorithmic stablecoin specialist Frax Finance intends to integrate frxUSD into the WLFI framework. The proposal focuses on how the company might benefit from WLFI’s distribution network, governance structure, and cooperation.
According to the proposal, WLFI wants to support US-based cryptocurrency projects and introduce millions of Americans to DeFi. FRAX could buy WLFI tokens with the initial $5 million investment, making them shareholders in the company’s governance structure. If there is proof that the basic objectives have been met, a second phase of up to $10 million might be offered.
Growing Impact of WLFI in U.S.-Based DeFi
Upon taking the oath of office, Trump has not formally referenced Bitcoin or any other virtual money, despite his strong support for these technologies throughout the campaign.
Given that his government was known to have promised support to digital currency initiatives based in the United States, this has drawn attention. However, WLFI’s activities align with the pro-crypto agenda, and the company is actively growing in the DeFi industry.
The top DeFi tokens, such as Ethereum (ETH), Chainlink (LINK), AAVE (AAVE), and Wrapped Bitcoin (BTC), have recently been added to the platform’s portfolio. The data shows that WLFI has more than $184 million in ETH assets and significant investments in other products.
The WLFI community can take part in ecosystem decision-making through its governance structure.
For example, Ethena Labs recently suggested using its stablecoin as collateral in Aave using WLFI’s governance platform. To further improve the use of FRAX in the WLFI domain, comparable governance options are also being explored for the frxUSD.
Strategic Role of FRAX in the Collaboration
Frax Finance’s U.S. roots and co-founder Stephen Moore’s ties to the Trump administration give it a distinct advantage in this proposed partnership.
A former Donald Trump economic advisor, Moore supports FRAX’s DeFi agenda focused on the United States’ legitimacy.
According to the proposal, this collaboration would improve FRAX’s standing in the DeFi community. Adding frxUSD as collateral to WLFI’s ecosystem may boost uptake among its millions of users. WLFI’s governance model also has potential benefits for FRAX, including the potential for strategic impact over future choices.
