Key Points
- As the supply of USD1 shrinks, WLFI has fallen by nearly 6%.
- USD1 Circulating market value decreases by $401 million
- An unidentified wallet address accounted for $200 million in redemption volume.
The WLFI token of World Liberty Financial fell by approximately 5.7% on October 20 to $0.0538; at the same time, the stablecoin USD1 associated with the Trump family saw its circulating market value decrease by $401 million within two weeks.
The market value of USD1 decreased from approximately $4.43 billion on October 6 to $4.02 billion on October 19, a shrinkage of 9.1%. An on-chain survey of OnChain Benchmark independently recorded that from October 6 to October 15, the net redemption volume of USD1 on Ethereum and BNB Chain was $385.03 million.
These data indicate that there has been a significant outflow of funds from the US dollar token ecosystem of World Liberty, but it does not prove that the redemptions of USD1 caused the price of WLFI to fall. During the aforementioned contraction period, USD1 maintained a 1:1 peg to the US dollar throughout.
USD1 Repaid $401 million, of which $200 million came from a single address
These redemptions are mainly concentrated on two blockchains.
As of October 15th, the net redemption volume on Ethereum amounted to 184.6 million US dollars, involving 63 token销毁s. On BNB Chain, there were an additional 200.43 million US dollars in redemptions, which only involved 12销毁s; during the same period, the supply of USD1 on Solana did not change.
What is more noteworthy is that the redemption activity of approximately $200 million on BNB Chain came from an unidentified wallet address, with transfers in batches ranging from $30 million to $50 million each.
The actual beneficial owner of this wallet and the reasons for its redemption are still unknown.
This contraction contrasts with the earlier expansion of USD1. At that time, as the adoption rate increased, the market value of USD1 once exceeded that of PayPal by PYUSD.
World Liberty has previously approved the use of treasury funds to support USD1, reflecting the importance of this stablecoin to its overall business strategy.
While WLFI is declining, World Liberty is preparing to advance the transition of its banking business.
A snapshot on October 20th shows that the trading price of WLFI is close to $0.054, which is significantly lower than the high point in September 2025. This sale has once again drawn market attention to the relationship between the governance tokens of WLFI and the circulation scale of USD1.
Unlike USD1, WLFI is not designed to maintain a fixed value in US dollars. Its price reflects trading demand, token supply, and investors' expectations regarding the World Liberty ecosystem.
The company has sought to expand the use cases of USD1, including expanding international payment purposes through the proposed foreign exchange and remittance services.
At the same time, World Liberty Trust Company received preliminary conditional approval from the US Federal Reserve (Office of the Comptroller of the Currency) in August.
The proposed institution plans to take over the issuance and reserve management of USD1 from BitGo. Currently, BitGo is responsible for minting and redemption.
However, the final authorization still depends on regulatory requirements. This approval does not mean that the trust bank proposed to be established by World Liberty has already begun operations.
Despite the decline in supply, USD1 still maintains a dollar peg.
These redemptions do not imply that USD1 has lost its support in US dollars.
OnChain Benchmark found that during the contraction period from October 6th to 15th, the trading price of USD1 ranged between $0.998 and $1.000. Tokens redeemed through the issuer's contract were destroyed, thereby reducing the circulating supply and not causing a persistent price deviation.
The reserve verification published by BitGo provides more transparency regarding the assets behind this stablecoin; however, the most recent monthly report available does not detail the composition of the reserves corresponding to each redemption in October.
The project was previously subject to scrutiny due to the centralized control of USD1, which included a dispute with an exchange involving the freezing of wallet addresses.
Its proposed expansion in the banking business has also drawn attention due to ownership and regulatory issues, which are separate from the latest round of redemptions.
