Research Report | USD1 Project Deep Dive

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远山洞见2025/05/26 09:20

By:远山洞见

1. Project Overview

USD1 is a USD-pegged stablecoin launched by World Liberty Financial Inc. (WLFI), designed to offer a low-friction and compliant digital dollar solution for institutions and users in need of a reliable stablecoin. Fully backed 1:1 by U.S. Treasury bills, dollar deposits, and cash equivalents, USD1 is custodied by BitGo and leverages Chainlink’s Proof of Reserves (PoR) to ensure on-chain transparency and regulatory compliance. Its primary use cases include DeFi lending, cross-border payments, and institutional settlement.

Launched in March 2025, USD1 is deployed on both Ethereum and BNB Chain, with a current circulating supply exceeding $2.1 billion, placing it among the top global stablecoins. USD1 is integrated with leading DeFi protocols such as Aave and Lista DAO, and has been listed on major CEXs including KuCoin and HTX. Notably, it was used in Abu Dhabi-based MGX’s $2B investment in Binance, underscoring its growing adoption in high-profile institutional scenarios.

Governance-wise, USD1 follows a mint-on-deposit and burn-on-redemption model with no lockups. All reserves are held in custody by BitGo, fully backed 1:1 with U.S. dollar assets, and are subject to third-party audits and on-chain verifiability. WLFI has implemented a zero team allocation policy, ensuring that all token issuance is driven purely by user demand, preserving liquidity and openness.

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WLFI’s founding team brings deep expertise in real estate and finance and includes former Paxos CEO and other prominent crypto veterans. Since October 2024, the project has raised $550 million via token sales. Governance and ownership are heavily led by the Trump family, positioning the project as a high-transparency, compliance-driven bridge between traditional and crypto finance.

2. Project Highlights

Robust Compliance Strong Backing Backed entirely by U.S. T-bills, USD deposits, and cash equivalents to ensure full 1:1 dollar peg, offering high asset safety and price stability.

On-Chain Transparency Verifiable Audits Chainlink’s Proof of Reserves enables real-time on-chain verification of reserves, boosting transparency and trust.

Broad DeFi Integration USD1 is natively compatible with major DeFi protocols such as Aave and Chainlink, supporting lending, LP participation, and yield farming.

Zero-Fee Minting Redemption WLFI eliminates traditional stablecoin fees on minting and redemption, lowering adoption barriers for institutions and retail users.

Multichain Deployment Cross-Border Settlement Currently live on Ethereum and BNB Chain, with plans to expand to other public blockchains. Well-suited for cross-border payments and large-scale institutional settlements.

Institutional Settlement Real-World Spending Supports not only on-chain payments but also real-world consumption via WLFI-issued debit cards. Also provides liquidity and settlement support for exchanges.

Top-Tier Custody Regulatory Oversight All reserves are managed by BitGo—one of the largest independent digital asset custodians—ensuring full compliance and asset security.

3. Token Allocation Use Cases

Token Distribution USD1 follows a fully user-driven dynamic minting model: every token is issued upon user deposit, with no team or project-side allocations. Each USD1 is backed by an equivalent dollar asset in BitGo custody, ensuring a 1:1 real-time reserve match. While early-stage distribution is somewhat concentrated due to institutional accounts, distribution is expected to decentralize over time as usage scales.

Token Release Mechanism USD1 involves no lockups, vesting, or scheduled releases. Circulating supply fluctuates based on real-time minting and redemption. Users receive USD1 immediately upon depositing USD, and tokens are burned upon redemption—typically completed within 2 business days. The mechanism ensures market-driven issuance and removes risks of team sell-offs or secondary market pressure.

Token Utilities

On-Chain Payments Settlement: USD1 is widely used for crypto-native transfers, DeFi payments, and large-scale cross-border settlements, with high liquidity across CEXs and DEXs.
DeFi Applications: Compatible with top DeFi protocols for lending, market-making, and liquidity mining. USD1 can be used as collateral for yield generation and liquidity access.
Fee-Free Usage: Minting and redemption are nearly fee-free, making it suitable for both institutional and retail use at scale.
Real-World Spending Ecosystem Integration: Usable via WLFI debit cards at POS terminals; also accepted across WLFI’s NFT, social, and ecosystem applications.
Custody Staking: Fully custodied by BitGo, offering robust security. USD1 may serve as collateral in some protocols but does not offer additional staking rewards.

4. Team Fundraising

Team Background USD1 is developed and operated by World Liberty Financial Inc. (WLFI). Key figures include:

Zach Witkoff, from a prominent real estate background, son of former U.S. Middle East envoy Steve Witkoff.
Zachary Folkman, COO, with extensive experience in DeFi and co-founder of Dough Finance.
Chase Herro, head of data strategy.
Eric Trump, company director and direct Trump family representative.

Governance-wise, WLFI is majority-owned (over 60%) by DT Marks DEFI LLC, a Trump family holding entity, which provides both capital support and political legitimacy.

Funding To date, WLFI has raised $550 million across multiple token sales from October 2024 to March 2025. Notable investors include:

Justin Sun, who personally invested $75 million into USD1 tokens.
MGX from Abu Dhabi, which invested $2 billion in USD1 for large-scale settlement with Binance. While exact details of fundraising rounds remain undisclosed, the project demonstrates substantial financial backing, laying the foundation for regulatory compliance and global rollout.

5. Potential Risks

Political Exposure: Given its affiliation with the U.S. presidential Trump family, the project may face heightened scrutiny in terms of regulation and policy compliance.
Centralized Governance: With ownership and decision-making concentrated in the Trump family and related entities, there is a risk of governance opacity and misaligned incentives.

6. Official Links

Website: https://www.worldlibertyfinancial.com/
Twitter: https://x.com/worldlibertyfi
Telegram: https://t.me/defiant1s

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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