The complementary path of "Trump Family Stablecoin" USD1: Institutional Investment and Meme Liquidity Pool

Author: Wenser, Planet Daily

Since WLFI officially announced the launch of the stablecoin USD1 on March 25, the circulation of USD1 has exceeded 2 billion coins in less than 3 months, with a market capitalization of 2.18 billion dollars. In comparison, USDT took about 5 years (early 2019) to reach this milestone; USDC took about 2 years (September 2020). Although the maturity of the cryptocurrency industry varies, achieving this in such a short time highlights the strong momentum of USD1's development. In light of this, Odaily Planet Daily will outline the development ideas of USD1 and the potential for large-scale adoption in this article for readers' reference.

The Ambitious Path of USD1: First Occupying Ethereum and BSC, Then Expanding to TRON

On March 25, amidst rampant market speculation, WLFI officially announced the upcoming launch of the "institutional-grade stablecoin"—USD1.

According to the official announcement, USD1 will be 100% backed by short-term U.S. Treasury bonds, dollar deposits, and other cash equivalents. Initially, USD1 tokens will be minted on the Ethereum and BSC chains, with plans to expand to other protocols in the future. Each token is designed to maintain a value of 1 dollar, fully supported by a reserve portfolio regularly audited by a third-party accounting firm; the USD1 reserves will be custodied by BitGo, the world's largest independent qualified custodian.

At that time, as a strong competitor to USDT and USDC, and backed by the Trump family project WLFI, the USD1 stablecoin project sparked market speculation, with many believing it could replace the two major stablecoins, USDT and USDC. In response, Binance founder CZ stated, "USDT and USDC do not need to be replaced; the more stablecoins, the better." The reason behind this is that BSC is one of the main ecosystems supporting USD1.

In the following days, as Congress was reviewing the "Stablecoin Innovation Act," five Democratic senators jointly sent a letter to the Federal Reserve and OCC, questioning the "unprecedented risks" posed by the USD1 stablecoin launched by the Trump family crypto project WLFI, directly targeting Trump, claiming he weakened regulatory independence through a February executive order and holds a 60% stake in WLFI, constituting a significant conflict of interest.

Despite this, USD1 continued to progress smoothly and was confirmed in May by WLFI co-founder Zack Witkoff that USD1 would also be natively issued on the TRON chain. On June 14, the first USD1 was successfully minted on the TRON chain, announced by TRON founder Justin Sun, and later confirmed by Eric Trump, the son of Trump.

Looking back at the nearly 2-month development path of USD1, this "new player in the stablecoin arena" exemplifies the synergy of the orthodox and the unconventional.

The Orthodox Path of USD1: Institutional Adoption as the Norm, Meme Liquidity as the Exception

As Sun Tzu's Art of War states: "In all battles, one must combine the orthodox and the unorthodox." This means that in warfare, there are generally two strategies: one is to engage in direct confrontation using conventional tactics, and the other is to launch a surprise attack using unconventional methods.

For a stablecoin project like USD1, since it lacks the first-mover advantage of early stablecoin projects like USDT and USDC, and given that Trump, as the President of the United States, is neither able nor willing to promote its large-scale adoption through executive orders or coercive policies, it needs to combine the orthodox and the unorthodox, having both a conventional approach for direct promotion and sufficient preparations for breaking through.

The Grand Orthodox Path of USD1: Institutional Investment and Institutional-Level Adoption

For stablecoin projects, the most important goal is—"to have users." For an early-stage stablecoin project, compared to the liquidity-dispersed market retail investors, the demand for institutional-level adoption is stronger, and the liquidity scale is much larger, which is why USD1 has focused on institutional adoption since its inception.

Specifically, WLFI has made two moves to promote institutional adoption of USD1:

First, in terms of investment. As Eric Trump, the son of Trump, previously stated, the USD stablecoin USD1 issued by WLFI has been officially selected as the stablecoin to complete the $2 billion investment by the UAE Sovereign Fund MGX in Binance. As the first massive financing case in cryptocurrency history, MGX's investment in Binance is undoubtedly a significant highlight in the history of cryptocurrency development. As the official stablecoin for this financing, USD1 will also create a major case for the global adoption of stablecoins while promoting the credibility and usability of crypto stablecoins in the global economic market. Additionally, at the end of May, WLFI announced that USD1 would be the only designated stablecoin for the well-known AI project Sahara Labs (SAHARA) on the Buidlpad platform. In the investment sector, USD1's climate has already formed.

Second, in terms of crypto market makers. DWF Labs, one of the well-known crypto market makers, is also an important partner of USD1. It not only participated in the early interactions of USD1 but also received 1 million USD1 in early April for market making. Furthermore, wallet users holding USD1 can participate in the beta testing and farming activities of the stablecoin protocol Falcon Stable under DWF Labs. Moreover, besides DWF Labs, the well-known market maker Wintermute was the top institutional holder of USD1 on the chain at that time, and Wintermute's OTC platform also opened support for USD1.

Third, regarding exchanges and crypto projects. USD1 has also received strong support from the BSC ecosystem. In addition to BSC being the native issuance network, the pillar project of the BSC ecosystem, Lista DAO, launched the USD1 Vault for its lending product Lista Lending in mid-April, marking the first application of this stablecoin on the BSC chain. Additionally, Binance announced in May that users withdrawing USD1 through the BNB Chain would enjoy zero fees. Subsequently, as USD1 gradually developed, various projects including BounceBit, Kernel DAO, the BSC ecosystem AI data labeling project Tagger, and many crypto exchanges have followed suit in supporting USD1.

Furthermore, the U.S. publicly listed company Amber International has included USD1 in its "100 million dollar crypto ecosystem reserve plan," and the presale of influencer Hasbulla's BULLA token also received funding related to USD1.

It can be said that crypto exchanges and projects, crypto market makers, and crypto investment institutions and platforms together form the "institutional adoption landscape" of USD1.

The Unconventional Path of USD1: Meme Liquidity and Large-Scale Airdrop Distribution

A stablecoin that only has institutional participation is not a good stablecoin, as the majority of the crypto market still consists of retail investors.

To promote the use and adoption of USD1 at the market user level, WLFI has also chosen to walk on two legs:

First, by encouraging and supporting meme coin projects to build USD1 liquidity pools to promote broader adoption of USD1. A landmark event in this initiative was WLFI's first purchase of the Binance Alpha token BuidlON (B) token, which was driven by the fact that the B token launched a USD1 liquidity pool. For more details, see the article "WLFI-Backed BUILDon Market Cap Reaches 400 Million Dollars, What Other Targets Are Worth Attention?" Not only that, WLFI later initiated a USD1 trading competition (liquidity promotion activity) in collaboration with multiple projects in the BSC ecosystem, encouraging meme coin projects in the BSC ecosystem to create USD1 trading pools. In the latest round of the event, the meme token EG L1, centered around American culture, won first place in the activity with a trading volume of nearly 200 million dollars in the past week.

USD1 Trading Competition Leaderboard

Second, WLFI had planned to airdrop USD1 to WLFI token holders as early as April. After passing a community proposal vote, this plan was officially implemented in early June, airdropping 47 USD1 tokens to WLFI subscribers' addresses (market speculation suggests this number may relate to Trump being the 47th President of the United States), and within a short time, a total of 4 million dollars was airdropped. It must be said that perhaps the development path of every stablecoin project cannot do without the "massive distribution of tokens" aspect.

In the latest news, WLFI has officially integrated with OKX Wallet, allowing users to seamlessly access the project and participate in cross-chain and other on-chain services for the stablecoin USD1. With this, WLFI and USD1 have successfully completed the last piece of their application puzzle—crypto wallets and other industry infrastructure.

Conclusion: The Explosive Potential of USD1 is Worth Looking Forward To

According to Coinmarketcap data, USD1 currently has a 24-hour trading volume of about 600 million dollars, with CEX trading volume accounting for about 20%; DEX trading volume accounting for about 80%, indicating that its "orthodox and unconventional" development path has already begun to show results.

At the critical juncture of the impending implementation of the U.S. stablecoin regulatory bill "Genius Act," backed by the Trump family and WLFI, the application scenarios of USD1 are expected to be further expanded. At that time, it may become another major stablecoin project following the "crypto stablecoin leader" USDT and the "first stock of stablecoins" USDC.

Moreover, influenced by Trump's presidential identity, USD1 may play a significant role as a medium for trade currency or in resolving U.S. Treasury bonds worth trillions of dollars in the subsequent tariff trade war.