Written by: Kyle Chayka, The New Yorker
Translated by: BitpushNews an
Imagine a person with immense political power who creates and publicly sells ten billion lottery tickets. Participants who purchase these tickets will ultimately receive a certain proportion of "magic beans" as a reward, with each "magic bean" convertible to one dollar. More critically, if tickets are purchased early, their price will be below one dollar, potentially as low as five cents per ticket. These tickets not only promise future traditional currency returns for holders but also grant voting rights on company affairs, allowing participation in managing the "magic beans" supply, with voting power increasing proportionally to the number of tickets purchased. It should be noted that the lottery organizer will reserve a batch of tickets, and most of the revenue generated by the "magic beans" economy will flow into their hands.
The above description actually reflects the operating mechanism of a new cryptocurrency created by World Liberty Financial, a company associated with the Trump family, with Donald Trump serving as the "Chief Crypto Advocate". This cryptocurrency is a governance token called WLFI, equivalent to lottery tickets, while another stablecoin named USD 1 corresponds to "magic beans". World Liberty Financial operates in the emerging DeFi field, where cryptocurrency tools enable users to bypass traditional, regulated banking ecosystems for fund transfer, storage, and lending. Stablecoins are cryptocurrencies pegged to a single currency's value, such as the US dollar, but not always stable, as demonstrated by Terra's collapse in 2022. As long as stablecoins are not classified as securities, their legal status remains ambiguous. World Liberty Financial stated: "We do not consider these tokens to be securities." In January 2023, the Trump family quietly acquired a controlling stake in World Liberty Financial through a company called DT Marks Defi. Although disclosures indicate Trump family members are not "executives, directors, or employees", DT Marks Defi receives 75% of the subsidiary's net income. (The remaining 25% belongs to Axiom Management Group, associated with World Liberty Financial's two official leaders Chase Herro and Zachary Folkman, notably, Folkman also runs a company called "Date Hotter Girls".)
Trump was once a cryptocurrency skeptic, explicitly stating in a 2019 tweet: "I do not like Bitcoin." However, in recent years, he has begun heavily promoting various "magic beans" projects, injecting a public relations boost into an industry where new enterprises often fail quickly. In 2022, he launched Trump Digital Trading Cards, a series of Non-Fungible Tokens (NFTs) still being released in new batches, including the January 2024 "mugshot" version featuring his photo glaring at police. (Bulk buyers of "mugshot" NFTs received invitations to Mar-a-Lago.) He also launched a meme coin just before his inauguration, a cryptocurrency based on internet popularity where early buyers sell to later buyers at higher prices, essentially a pyramid scheme. The Trump meme coin ($TRUMP) consists of one billion coins, with 80% held by Trump-related companies and the remainder sold to the public. Reports indicate sales generated approximately $350 million in revenue, with a market value near $3 billion; notably, Trump's business entities earn transaction fees from each Trump meme coin trade.
The Trump meme coin price has now dropped to less than one-fifth of its historical peak, with many buyers experiencing investment devaluation. The subsequent "Melania Trump meme coin" performed even worse. However, a recent event organized by Trump-affiliated organizations and the crypto project company "Fight Fight Fight" has somewhat revived the coin's price. In this crypto carnival where on-chain holdings serve as entry tickets, the top 220 holders qualify for dinner with Donald Trump—a dinner at the Trump National Golf Club in Washington D.C. that essentially creates a new political donation channel. The top 25 "whales" can even enter a closed-door reception. This new lobbying access mechanism, built on token holdings, directly converts crypto holdings into political contact capital, making the Trump coin an alternative power monetization channel outside traditional political donation systems. Many meme coin investors are from overseas, some openly expressing hopes of influencing Trump's policy agenda. For instance, an Australian entrepreneur told The New York Times he hopes to discuss crypto policies with the president, while a Mexican buyer expressed hopes of drawing Trump's attention to tariff issues. On Tuesday, a small company operating TikTok's e-commerce business in China announced plans to purchase $300 million worth of Trump coins and Bitcoin, at a time when the Trump administration is considering a TikTok ban.
However, World Liberty Financial's influence extends far beyond the Trump meme coin. Its stablecoin can be easily and reliably exchanged for US dollars, almost creating an underground economic system sponsored by Trump, like opening a new bank under the current president's name, with numerous foreign enterprises and political elites worldwide channeling substantial funds. Major buyers include Chinese crypto entrepreneur Justin Sun, who purchased $75 million worth of WLFI, and DWF Labs, an Abu Dhabi-based crypto trading company that bought $25 million of WLFI. In March, World Liberty Financial announced token sales exceeding $500 million. Earlier this month, another Abu Dhabi-based investment firm announced using the USD 1 stablecoin controlled by World Liberty Financial to invest $2 billion in Binance, the world's largest crypto exchange.
Purchasing Trump-style "magic beans" is a means of gaining influence, similar to foreign dignitaries staying at the Trump International Hotel in Washington D.C. during his first term. However, compared to that, World Liberty Financial's actions make hotel rentals seem insignificant. The more funds flow into WLFI and USD 1, the more legitimate and valuable these currencies appear, with their market value rising accordingly. The world's largest stablecoin, Tether, has a market value approaching $150 billion, with daily trading volumes exceeding $30 billion. World Liberty Financial craves similar influence.
For a long time, the American public has been flooded with news about the Trump family's pursuit of personal gain, to the point where many of their actions now barely cause a stir. Just this week, there were reports that the government is preparing to accept a luxurious Boeing 747-8 aircraft gifted by the Qatari royal family as the new "Air Force One", at least until Boeing completes the new "Air Force One". The Department of Defense will receive the aircraft, but reportedly, when Trump leaves office, the plane will be donated to his presidential library, making this $400 million aircraft private property—despite this arrangement seemingly clearly violating foreign gift provisions that prohibit U.S. officials from accepting gifts from foreign leaders and governments. (Trump had previously dismissed ethical concerns by suggesting that refusing gifts was "stupid".) However, in the cryptocurrency realm, opposition within Congress to Trump's business activities is continuously growing. Last week, some Democratic senators refused to pass a widely popular pro-cryptocurrency bill due to the president's blatant profit-seeking behavior. Wyoming Republican Senator Cynthia Lummis recently stated in an interview with The New York Times: "The negative impacts of such actions are obvious." Nevertheless, so far, the Trump family seems to have accurately bet on one fact: no one can truly stop them.
