Wolrd Liberty Financial, the new DeFi project by Donald Trump, has sold its cbBTC tokens to purchase wBTC, another wrapped Bitcoin asset.
This move could have political implications, breaking away from the centralized control of Coinbase to embrace the freedom of decentralization.
Let’s see everything in detail below,
Donald Trump and all the operations carried out with the World Liberty Financial project
In the last few days, World Liberty Financial, Donald Trump’s crypto project, has been particularly active within the cryptocurrency market.
The team of this platform, which aims to offer decentralized mortgage and loan services in digital assets, has decided to purchase several coins during the month of December.
Supported by the power of the Trump family, World Liberty Financial is likely seeking to make strategic investments in order to offer greater liquidity to its clients.
Among the crypto that have been scrutinized by Donald Trump and his group of experts, we predominantly find coins from the DeFi sector.
More closely, we see that from December 12 to today, 10 million dollars in ETH, 1 million dollars in Chainlink, and 1 million dollars in Aave have been purchased.
Furthermore, Trump’s project has invested 500,000 dollars in the ENA token and 250,000 in ONDO, also riding the growing RWA narrative.
The latest of the operations dates back to last night and concerns the swap between cbBTC and wBTC for an equivalent value of 10.4 million dollars.
The exchange between the two wrapped variants of Bitcoin, which reflect the value of BTC at a 1:1 ratio but are issued by different backers, took place on the Cow Protocol platform.
In addition to the bull and bear operations, Trump’s protégé is also making waves for the strategic partnerships he is closing and for his future plans.
Recently, it has indeed partnered with Chainlink to ensure price determination and cross-chain interoperability, seamlessly integrating into the broader crypto ecosystem.
In addition, there is an ongoing governance proposal to implement the Aave v3 instance of World Liberty Financial on Ethereum, with the goal of encouraging a greater flow of users and increasing its popularity.
The reason for the swap between cbBTC and wBTC by the Donald Trumo project?
To understand the motivations behind the swap between cbBTC and wBTC by Donald Trump’s project, we must first understand the nature of the two coins.
As mentioned, they are both linked to BTC in wrapped form with their value reflecting exactly that of BTC, therefore there is no speculative preference.
Furthermore, both have ample liquidity, high trading volumes, and are strongly established in the crypto landscape.
The only substantial difference is represented by the companies and the ways in which they are issued on the market.
cbBTC, is a wrapped version of Bitcoin supported by Coinbase: users can exchange the currency using the cbBTC Hub platform by Definitive.
wBTC, on the other hand, is managed by a smart contract controlled by a DAO, composed of various custodians, merchants, and agreed institutions. The exchange BitGo is the only custodian of the Bitcoin reserves, but the management and distribution of the resource is entrusted to multiple decentralized entities.
Unlike cbBTC where only Coinbase manages the cryptocurrency, on wBTC it is the DAO that makes common decisions such as changes to the smart contract and evaluates the addition/elimination of its members.
Donald Trump with his DeFi project, might have preferred to move to a more trustless and open management, rather than submit to the control of Coinbase.
In fact, by holding cbBTC World Liberty Financial would have been exposed to the risk of censorship and blocking by Coinbase in the event of potential disagreements.
With wBTC the issue is much more complex, as there are various institutions involved in the DAO and offering greater freedom of maneuver.
Furthermore, Trump’s decision to swap the two currencies may have been influenced by last night’s speech by Powell at the FOMC. During his speech, the head of the FED stated that the central bank is not authorized to hold Bitcoin, implying the impossibility of a balance sheet with a crypto component.
The purchase of wBTC could be seen as a jab at Powell, positioning itself around a currency no longer under the control of a US company, but under the control of the global crypto community.
The ambitious future of Trump’s project
World Liberty Financial (WLFI), first announced by Donald Trump on September 16, 2024, is gaining significant traction in the crypto world.
Under the leadership of the new President, the platform could play a crucial role in the DeFi landscape by offering its lending services to a wide range of institutional clients.
Trump has promised to do “something big with cryptocurrencies” and to make the United States the global leader in cryptocurrency innovation.
With WLFI, its plans are to strengthen the position of the US dollar in the world of cryptocurrencies, promoting the adoption of stablecoin and decentralized finance.
The latest proposal for the inclusion of the Aave v3 interface speaks volumes about the project’s ability to aggregate with the top infrastructure of the industry.
The future of World Liberty Financial appears promising and oriented towards decentralization, especially after the latest swap operation between cbBTC and WBTC. With the support of Donald Trump and other influential figures, the project has the potential to attract a growing number of users and investors in the coming months.
Most likely, other purchase operations will be carried out on other crypto assets, in order to expand the portfolio and enhance the lending platform.
Furthermore, the adoption of innovative technologies and the focus on security and transparency will help strengthen trust with the crypto community.
We remain waiting to discover what Donald Trump’s next moves will be and which assets he will decide to purchase, shaking the crypto exchanges once again.