Key takeaways
- WLFI falls nearly 6% as USD1 supply contracts
- USD1 loses $401 million in circulating market value
- One unidentified wallet accounts for $200 million in redemptions
World Liberty Financial's WLFI token fell approximately 5.7% to $0.0538 on October 20, while the Trump family-linked project's USD1 stablecoin experienced a $401 million reduction in circulating market value over two weeks.
USD1's market capitalization declined from approximately $4.43 billion on October 6 to $4.02 billion on October 19, a 9.1% contraction. An on-chain investigation by OnChain Benchmark independently documented $385.03 million in net redemptions between October 6 and 15 across Ethereum and BNB Chain.
The figures point to substantial withdrawals from World Liberty's dollar-token ecosystem, although they do not establish that USD1 redemptions caused WLFI's price decline. USD1 maintained its dollar peg throughout the documented contraction.
USD1 Redemptions Reach $401 Million, With $200 Million From One Address
The withdrawals were concentrated across two blockchains.
Ethereum accounted for $184.60 million in net redemptions through October 15, involving 63 token burns. BNB Chain recorded another $200.43 million across just 12 burns, while USD1 supply on Solana remained unchanged during the same period.
More notably, approximately $200 million of the BNB Chain redemption activity originated from one unidentified wallet, transferred in batches ranging from $30 million to $50 million.
The wallet's beneficial owner and reasons for redeeming remain unknown.
The reduction contrasts with USD1's earlier expansion, when growing adoption helped it surpass PayPal's PYUSD in market capitalization.
World Liberty previously approved treasury funding to support USD1 adoption, reflecting the stablecoin's importance to its broader business strategy.
WLFI Price Declines While World Liberty Prepares Banking Transition
WLFI traded near $0.054 in the October 20 snapshot, well below its September 2025 highs. The selloff has renewed attention on the relationship between the WLFI governance token and USD1's circulation.
Unlike USD1, WLFI is not designed to maintain a fixed dollar value. Its price reflects trading demand, token supply and investor expectations about World Liberty's ecosystem.
The company has already sought to expand USD1's utility through international payments, including a proposed foreign-exchange and remittance service.
Meanwhile, World Liberty Trust Company received preliminary conditional approval from the Office of the Comptroller of the Currency in August.
The proposed institution intends to take over USD1 issuance and reserve management from BitGo, which currently handles minting and redemptions.
However, final authorization remains subject to regulatory requirements. The approval does not mean World Liberty's proposed trust bank has already begun operating.
USD1 Maintains Dollar Peg Despite Supply Decline
The redemptions do not indicate that USD1 has lost its dollar backing.
OnChain Benchmark found that USD1 traded between $0.998 and $1.000 during the October 6–15 contraction. Tokens redeemed through the issuer's contracts were destroyed, reducing circulating supply rather than creating a lasting price deviation.
BitGo's published reserve attestations provide additional transparency into the assets backing the stablecoin, although the latest available monthly report does not establish the reserve composition for every October redemption.
The project has previously faced scrutiny over USD1's centralized controls, including an exchange dispute involving frozen wallet addresses.
Its proposed banking expansion has also attracted attention over ownership and regulatory questions, separate from the latest redemptions.
