Donald Trump Is Now a DeFi Enthusiast. Here’s Why It Matters

World Liberty Financial, revealed on September 16, presents a decentralized lending and borrowing system, based on Aave and Ethereum, as well as dollar-backed stablecoins to preserve the U.S. dollar‘s influence in global commerce. However, doubts about the project’s authenticity and potential conflicts persist. The proposed 70% allocation of tokens to insiders initially raised questions, hinting that this venture may prioritize financial profits over technological advancement. Nevertheless, as per Trump’s team, the insider token allocation has been revised down to 20%, with 63% being offered in a public sale.

Essentially, Eric and Donald Trump Jr., along with Barron Trump, who holds the title “Chief DeFi Visionary” at 18 years old, are spearheading this project. However, Chase Herro, a person with a questionable background and a history of doubtful business deals, appears to be the project’s mastermind operating behind the scenes. The whitepaper obtained by CoinDesk reveals that early versions of the code were based on Dough Finance, which suffered a $1.8 million loss in a flash attack in July. It’s believed that all technical development has been contracted out to external parties, increasing the risk of cyberattacks, such as those the FBI cautions are being orchestrated by North Korea.

Without sufficient technical merit, it appears World Liberty Financial’s hurried debut might be strategically timed to cash in on the crypto craze. The timing of this announcement, so close to a national election, hints at political motives for an already contentious issue. Moreover, Trump’s public endorsement of DeFi, regardless of his true comprehension of the technology, cannot be ignored.

Cryptocurrency isn’t just a fleeting trend but a defining force, first in modern finance and now in politics. In July 2024 Trump edited the official Republican Party platform to promote defending Americans’ “right to mine Bitcoin” and “self-custody of their digital assets” as well as transacting “free from government surveillance and control.” Betting a political platform on Bitcoin – as Trump is doing – implies confidence that enough of the populace cares about these issues. Crypto has entered mainstream politics.

Historically, policymakers and authorities have shown reluctance or even hostility towards cryptocurrencies. For instance, former President Trump openly expressed his disapproval in 2019, stating that he was not a supporter of Bitcoin and other digital currencies, considering them as not being equivalent to traditional money.

Reportedly, Trump’s shift in stance could be associated with the significant presence of affluent cryptocurrency leaders at fundraising events, who generously contributed to his campaign. However, it’s worth noting that many other influential figures have expressed interest in digital finance, suggesting a growing acceptance of its potential: Grammy-winning artist Billie Eilish, tennis champion Serena Williams, BlackRock CEO Larry Fink, and even the U.S. House of Representatives, which passed a bill to establish a legal structure for digital assets, despite cautions from the SEC.

Cryptocurrencies have solidified their position as more than just a speculative trend, significantly impacting political and financial landscapes globally. What was initially perceived as an obscure technology has gained mainstream recognition, with many people embracing its potential. To the point where it’s no longer feasible to ignore or dismiss it. High-ranking officials at established institutions are advocating for it, while regulatory bodies are developing policies aimed at promoting safe and widespread use. Furthermore, politicians from various levels are engaging with cryptocurrencies – even presidential candidates like Trump and Harris accept donations in crypto.

Trump’s involvement with DeFi signifies that we’ve hit a significant turning point. Digital assets are now recognized for their advantages rather than just their potential risks. Our perspectives on money, investments, and governance are evolving as cryptocurrency continues to integrate deeper into the contemporary political and economic landscape. While Trump’s endeavor might not succeed, given the nature of crypto projects, it indisputably signifies a new phase in our evolution.

Blockchain isn’t merely a technology for tomorrow; it’s already a significant influencer in the present. A few short years ago, discussing crypto as a contentious matter in a presidential election would have seemed absurd, let alone a candidate launching a project based on it. The merging of Decentralized Finance (DeFi) initiatives with the highest tiers of politics suggests that cryptocurrency has firmly established itself within our financial infrastructure. Its influence is expected to be undeniable and enduring.

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