ALT5 Assigns Value of $0.20 to WLFI Tokens in Acquisition Agreement
In a significant development for the cryptocurrency market, World Liberty Financial’s WLFI tokens have been assigned a value of $0.20 each as part of a share acquisition agreement with ALT5 Sigma Corporation. This marks the first time the token has been given a market value since its introduction.
Valuation Marks a Milestone for WLFI Tokens
The partnership between World Liberty Financial and ALT5 Sigma Corporation has established a valuation for the WLFI token, which is backed by former President Donald Trump, for the first time since its launch last year. On Monday, ALT5 revealed its intentions to transform into a crypto treasury firm by issuing 200,000 new shares, with plans to use the generated funds to acquire WLFI tokens worth $1.5 billion. According to Matt Morgan, ALT5’s chief investment officer, half of the newly issued shares will be exchanged for WLFI tokens held by World Liberty Financial, thereby valuing each token at $0.20. However, it remains unclear if World Liberty Financial is the sole entity swapping its tokens for shares, as the company mentioned participation from other unnamed institutional investors and venture capital firms.
WLFI Tokens Previously Sold Without a Market Value
This recent development is particularly noteworthy as it is the first valuation of WLFI tokens since World Liberty Financial conducted a token sale, raising $550 million from investors between October and March. During that period, the price paid by investors varied based on when they entered the sale. Notably, prominent WLFI investors include Tron founder Justin Sun, who purchased $75 million worth of tokens during the sale. At its launch, WLFI was structured to prevent trading, which resulted in a lack of market valuation for the token.
Emerging Trend of Crypto Treasury Companies
This deal also underscores the rising trend of crypto treasury companies, a concept popularized by Michael Saylor. Since 2020, Saylor’s firm has issued debt or shares to acquire Bitcoin, leading to a remarkable 3,500% increase in its share value. In the past year, a new wave of crypto treasury firms has emerged, inspired by Saylor’s strategy, particularly under a favorable regulatory environment during the Trump administration. Many of these firms employ debt or share issuance to amass their preferred cryptocurrencies and often arise through reverse mergers with struggling public companies.
Potential Conflicts of Interest in Crypto Treasury Operations
There are instances where conflicts of interest arise between these treasury companies and the crypto assets they acquire. For example, Tron Inc—a crypto treasury company planning to purchase TRX, the native token of the Tron blockchain—has Weike Sun, the father of Justin Sun, on its board. The firm identified this familial connection as a potential conflict of interest in its recent S-3 filing. As part of ALT5’s strategic shift, several executives and supporters from World Liberty Financial have been appointed to its board, including CEO Zach Witkoff, COO Zak Folkman, and Eric Trump, son of the former president. All three hold WLFI tokens, thus having a vested interest in the token’s performance. Morgan refrained from commenting on the potential conflicts of interest arising from these board appointments.
Governance and Trading of WLFI Tokens
The WLFI token is intended to serve as a governance mechanism for World Liberty Financial. Token holders are granted the ability to vote on protocol changes, as indicated by the project’s developers. However, it is essential to note that WLFI is not classified as a decentralized autonomous organization (DAO), a popular structure in many decentralized finance (DeFi) projects. In July, WLFI holders voted to enable trading of the token, a decision put forth by the project’s creators. World Liberty Financial has announced that trading could commence as early as the end of August.
