Trump-Connected World Liberty Financial Taps Aave for DeFi Growth

Colombian neobank Littio is migrating from Ethereum to Avalanche to scale its innovative Yield Pots, which offer users access to US Treasury bills, while the Trump-connected World Liberty Financial is set to launch on Aave, bringing DeFi exposure to US dollar assets for a new audience. 

World Liberty Financial Partners with Aave for DeFi Launch, Backed by Trump Family

World Liberty Financial (WLF), a project backed by the Trump family and close allies, has announced plans to launch using Aave V3 on the Ethereum mainnet. This collaboration is expected to bring both traditional and institutional finance closer to the DeFi ecosystem, while potentially introducing a new audience to decentralized finance.

The announcement, made on Wednesday, highlights WLF’s decision to utilize Aave due to its reputation as a secure and reliable lending and borrowing platform. “We chose @aave because it’s the best-in-class lending & borrowing protocol with top-notch security practices and a strong track record. Partnering with Aave enables us to deliver a reliable platform our users need,” the team stated in a post on X.

World Liberty Financial’s upcoming platform is expected to offer users the ability to borrow and lend various digital assets, including Ethereum (ETH), Wrapped Bitcoin (WBTC), and prominent stablecoins such as USDC and USDT. The governance proposal, shared on Aave’s forum, outlines how the protocol will function similarly to Aave’s established platform: users will earn interest on their deposits from the fees paid by borrowers, a mechanism already familiar to DeFi users. 

However, WLF plans to take it a step further by exploring the integration of assets that may not traditionally fit within Aave’s core markets. The project will leverage its connections to traditional finance and institutional investment to potentially introduce new financial products to the DeFi ecosystem. 

An interesting element of WLF’s integration with Aave is the use of the platform’s reserve factor system. Under this arrangement, 20% of the interest generated on WLF’s platform will be allocated to the Aave Ecosystem Reserve. This will be facilitated through a trustless smart contract, ensuring transparency and autonomy in the revenue-sharing process.

Marc Zeller, founder of the Aave Chain Initiative (ACI), commented on WLF’s initiative. While he is not in direct contact with the former president, he and the ACI have provided assistance in learning how to use the Aave tech stack. “We’re thrilled to witness the unique integration of the Aave Stack by the WLF team,” he said, signaling the Aave community’s support for the project.

The WLF team is already planning its next phase: expanding onto Scroll, a Layer-2 scaling solution for Ethereum. Layer-2 networks like Scroll aim to reduce transaction fees and improve the scalability of blockchain networks, making it an ideal choice for WLF’s future growth.

In addition to this, the WLF project plans to issue a non-transferable governance token, WLFI, to accredited investors. The token distribution is outlined as follows: 63% will be sold to the public, 17% reserved for user rewards, and 20% allocated to team compensation. This model provides a clear path for governance and rewards within the platform, creating a decentralized decision-making framework while compensating early contributors.

The Trump Connection: Mixed Reactions from the Crypto Community

While former President Donald Trump has had a controversial relationship with the cryptocurrency world in the past, his involvement with World Liberty Financial has generally been seen in a positive light by certain segments of the industry. Many believe that the Trump family’s name recognition could bring more attention to the DeFi space, particularly among American audiences, where DeFi adoption remains relatively low.

With over $57 billion staked across DeFi protocols on Ethereum, Solana, and Tron, the sector holds immense potential but lacks mainstream adoption. Some experts are optimistic that WLF could serve as a bridge between traditional finance and DeFi, attracting new users who may not have previously considered participating in decentralized finance.

Marc Zeller of Aave echoed this sentiment, stating, “World Liberty Financial has the potential to introduce new audiences to the decentralized finance ecosystem.” This could be a game-changer for the DeFi landscape, opening doors for further innovation and user growth.

However, skepticism remains among certain crypto enthusiasts. Given Trump’s divisive reputation, some are wary of the project’s ability to genuinely engage with the decentralized ethos of blockchain technology. “I am very curious to see how this new instance will evolve and what kind of new user base will be onboarded to Aave,” commented Aave user EzR3aL on the governance forum. Despite these concerns, the user noted that the revenue share and token distribution models “seem fair and signal that a good relationship is important for WLF.”

Before World Liberty Financial can officially launch its Aave v3 instance on Ethereum mainnet, the Aave community must go through its governance process. This includes an initial “temperature check” vote, where Aave token holders will express their initial views on the proposal. If successful, the project will move into a community feedback phase, followed by a testing period and eventual mainnet deployment.

The WLF team has expressed its optimism that the project will strengthen Aave’s position as a market leader in decentralized borrowing and lending. 

Littio Switches to Avalanche Network as Demand for US Treasury Exposure Grows in Latin America

Latin American neobank Littio is making waves in the financial technology landscape by shifting its blockchain infrastructure from Ethereum (ETH) to Avalanche (AVAX). This strategic move, designed to accommodate the growing demand for Littio’s unique financial product, known as Yield Pots, represents a significant milestone for both the neobank and the blockchain ecosystem. Yield Pots allow users to earn interest on US dollar deposits, giving Latin Americans access to one of the most sought-after financial assets—US Treasury bills.

Littio’s decision to migrate from Ethereum to Avalanche comes in response to the rapid growth in demand for its Yield Pots, which have attracted substantial transaction volume since their February launch. According to the company, Avalanche’s low transaction fees and consistency were key factors in the decision, enabling the platform to scale more efficiently and provide a seamless user experience.

The Avalanche network has built a strong reputation for being a fast, low-cost, and environmentally sustainable blockchain, which has made it an attractive option for projects looking to scale. In 2022, the Avalanche Foundation launched a $50 million program aimed at incentivizing the development of real-world assets (RWAs) on its network, encouraging innovations that bridge traditional finance with blockchain technology. Littio’s switch to Avalanche aligns well with this initiative, adding a significant win for Avalanche as it seeks to expand its presence in the DeFi space.

Littio’s Yield Pots provide users with exposure to US Treasury bills through a partnership with OpenTrade, a London-based firm that develops yield-bearing products leveraging both stablecoins and real-world assets. US Treasury bills, considered one of the safest financial instruments, offer attractive yields that are appealing to investors worldwide, particularly those in emerging markets like Latin America, where local currencies have experienced significant depreciation against the US dollar.

Stablecoins—digital currencies pegged to government-issued fiat like the US dollar—are central to Littio’s operations. By using USDC, a popular stablecoin, Littio ensures that its users can interact with the global financial system without needing direct access to traditional banks. For users in Latin America, where inflation and currency volatility have eroded local purchasing power, stablecoins and US Treasuries offer a much-needed hedge against financial instability.

“Currently, [Littio] is the only Latin American neobank using [our vaults], but we have more clients set to come online this year offering different types of USDC-based fintech services,” said Jeff Handler, Chief Commercial Officer at OpenTrade, in a statement. Handler further explained that many of OpenTrade’s interested clients include neobanks, centralized exchanges, and payment companies. These organizations are leveraging USDC to meet the demand for USD-denominated financial services in a region where accessing such services through traditional banking infrastructure can be difficult.

Littio’s innovative financial product has already made a significant impact across the region. Available in Colombia, Argentina, El Salvador, Brazil, and Mexico, the neobank’s Yield Pots have garnered over $80 million in transaction volume in just a few months. Users have collectively earned $250,000 in returns over the past four months, a sign of the growing interest in US Treasury exposure in Latin America. Littio holds and reinvests between $11 million and $13 million per month in OpenTrade vaults, ensuring that users have ongoing access to yield-bearing products.

For comparison, US financial giant Franklin Templeton has also recognized the potential of tokenized US Treasuries. Its tokenized money market fund, launched in 2021, provides registered users with exposure to US Treasuries and has amassed $435 million in assets to date. While Littio’s current assets under management are smaller, the rapid growth of its Yield Pots suggests that Latin America is ripe for further expansion of tokenized financial products.

According to Littio’s website, the yields from its vaults range between 2% and 5%, offering a stable return that is highly attractive in a region where inflation often far outpaces these numbers. The Colombian peso, for example, has lost more than 54% of its value against the US dollar over the past decade and has depreciated by 88% since 1990. With such stark economic realities, the allure of earning in U.S. dollars becomes even stronger for consumers and businesses alike.

Filling the Financial Gap in Latin America

The demand for Littio’s Yield Pots is not only driven by the depreciation of Latin American currencies but also by the region’s unique financial challenges. Depending on where Littio customers are located, they may face currency restrictions, high inflation rates, or even a lack of access to traditional banking services. In countries like Argentina, where currency controls limit the amount of US dollars citizens can legally hold, Littio provides an alternative means of accessing US dollar-denominated assets.

Additionally, many people across Latin America lack the means to open bank accounts through their country’s traditional financial system. Littio, by using blockchain technology and stablecoins, allows users to bypass these traditional barriers, giving them the ability to save, earn interest, and transact in a stable currency—something that may have been previously unattainable.

As Littio continues to grow, its move to Avalanche could set a precedent for other Latin American fintech companies looking to offer stablecoin-based products or yield-bearing services. By leveraging blockchain technology and tokenized real-world assets like U.S. Treasury bills, Littio is filling a vital financial gap in Latin America, where consumers are seeking safe, secure, and profitable ways to manage their money.

The switch to Avalanche not only allows Littio to scale efficiently but also highlights the importance of choosing the right blockchain network to meet growing user demand. With Avalanche’s support for real-world asset development and the increasing demand for U.S. dollar exposure across the region, Littio is well-positioned to expand its offerings and introduce more Latin Americans to the benefits of decentralized finance.