Key conclusions

• World Liberty Financial entered the DeFi lending market with the launch of World Liberty Markets, an onchain lending and lending platform built around the USD1 stablecoin pegged to the dollar.

• The platform uses clever contracts to manage lending terms, replacing centralized intermediaries with see-through and automated risk controls that are perceptible on the blockchain.

• USD1 plays a key role as a primary lending and settlement asset, allowing users to unlock liquidity from volatile assets such as ETH or tokenized Bitcoin without selling these assets.

• Supported collateral includes major cryptocurrencies and stablecoins, with plans to add tokenized real-world assets, expanding onchain credit beyond pure crypto markets.

World Liberty Financial is a novel entrant in the decentralized finance (DeFi) space. A project associated with the family of US President Donald Trump entered the cryptocurrency lending market with the launch of World Liberty Markets.

World Liberty Markets is an onchain lending platform built around the project’s US dollar-backed stablecoin, USD1. With the circulating supply of USD1 currently standing at approximately $3.4 billion, the project positions stablecoins not only as a payment tool, but also as an vital element of blockchain-based credit markets.

This article examines the debut of World Liberty Markets and USD1 and the broader expansion of DeFi lending and credit access. It explores how onchain lending works, why stablecoins play a key role in decentralized credit, World Liberty’s long-term strategy, and how users can safely navigate clever contract-based platforms.

What is World Liberty Financial?

World Liberty Financial is a DeFi initiative focused on building blockchain-based financial services, including payments, lending and treasury management. The project has attracted additional attention due to its reported connections to members of the Trump family. It places emphasis on the development of compliant and see-through cryptocurrency financial products.

While its political associations have attracted attention, the project’s broader vision is consistent with the DeFi industry’s broader trend toward creating financial systems that integrate stablecoins, collateralized loans, and tokenized assets in a unified onchain framework.

Did you know? Some DeFi lending protocols can process liquidations in seconds, faster than many exchanges can halt trading. During edged movements in the cryptocurrency market, automated bots – not humans – typically compete to carry out these liquidations.

World Liberty Markets and USD1 debut

World Liberty Financial has he came in digital asset lending sector, reflecting the growing focus on decentralized lending as the legal framework becomes clearer. Its novel platform, World Liberty Markets, debuted on January 12, 2026, to facilitate cryptocurrency borrowing and lending. The system operates using World Liberty’s USD1 stablecoin and the WLFI governance token.

Before the launch of the lending initiative, USD 1 was already used for:

The rapid growth in the supply of the $1 suggests that it is being used not only as a trading pair, but also as a settlement asset for a wider range of financial activities. This liquidity now extends to onchain credit markets through World Liberty Markets.

World Liberty Markets expands DeFi lending and credit access

World Liberty Markets is an onchain protocol for lending and borrowing. Enables users to:

• Deposit assets to earn money as a lender

• Provide collateral and borrow against it

• Manage all positions using clever contracts, not centralized intermediaries.

The platform serves both sides of the credit market in one decentralized system. It is structured similarly to established DeFi lending protocols, with $1 serving as the central liquidity asset.

Instead of relying on off-chain balance sheets or manual underwriting, lending terms, collateral ratios and liquidation thresholds are enforced by automated clever contracts. Risk parameters are perceptible directly on the blockchain.

Did you know? In DeFi, interest rates can change block by block, which means borrowing costs can update every few seconds on faster blockchains. This differs from time-honored loans where the interest rate is usually fixed for months or even years.

How the onchain credit system works

At its core, World Liberty Markets operates as a secured lending marketplace. Users deposit assets into pools made available to borrowers. The collateral must exceed the value of the loan to protect lenders from default.

Supported security:

• Ether (ETH)

• Tokenized representations of Bitcoin (BTC).

• Stablecoins like USDC (USDC) and USDt Tether (USDT)

• $1.

Interest rates vary depending on supply and demand within each asset pool. When the value of collateral falls below the required thresholds, positions may be automatically liquidated to maintain solvency.

World Liberty has also signaled plans to support tokenized real-world assets (RWAs), which could allow tokens tied to real estate or treasury instruments to be used as collateral. If implemented, this will expand onchain credit beyond purely crypto assets.

Why stablecoins are essential for onchain lending

Stablecoins play a key role in cryptocurrency markets because they offer:

In the World Liberty setup, $1 serves as the primary borrowing and lending currency. Users can supply volatile assets such as ETH or tokenized BTC and lend $1, gaining liquidity without selling these assets.

This model is similar to conventional secured loans, where the borrower pledges assets in exchange for cash, but operates entirely on blockchain-based systems.

Stablecoin lending also supports more advanced financial activities, including leveraged trading, hedging strategies, and treasury financing for cryptocurrency companies.

OCC application and World Liberty long-term strategy

This is followed by the launch of the World Liberty lending campaign app regarding a national trust bank charter with the U.S. Office of the Comptroller of the Currency (OCC). While approval remains uncertain, the proposal signals a long-term strategy focused on regulatory compliance.

If granted, such a card could potentially allow World Liberty to:

• Providing care services

• Combine stablecoin issuance with regulated financial activities

• Make partnerships easier with time-honored payment systems.

This approach reflects a broader shift in the cryptocurrency industry, where companies are increasingly using regulated structures rather than operating entirely outside of time-honored finance.

Greater clarity on stablecoin and digital asset custody regulations in the U.S. and other regions has reduced uncertainty for institutional participants, encouraging renewed interest in blockchain-based lending systems.

Did you know? Stablecoin issuers collectively hold more short-term U.S. Treasury bills than the central banks of many mid-sized countries, making stablecoins an unlikely but growing contributor to global government debt markets.

The evolution of cryptocurrency lending

Crypto lending markets have failed in the last cycle, largely due to centralized entities that:

Cases like BlockFi and Celsius have highlighted the risks associated with centralized lending models, rather than the shortcomings of blockchain technology itself.

In comparison, DeFi lending protocols work with:

Meanwhile, venture investing and development activities in decentralized credit continue to grow. Projects focusing on Bitcoin-backed lending, RWA tokenization, and institutional DeFi systems are gaining increasing interest, suggesting that onchain lending is maturing and becoming a more established segment of the market.

Navigating clever contracts and market volatility

Even with growing interest, onchain lending still carries risks, including:

• Intelligent contract vulnerabilities

• Market shocks that could result in rapid liquidation

• Regulatory Uncertainty Regarding Stable Coin Reserves

• Liquidity concentrated in a narrow set of assets.

Additionally, while overcollateralized loans reduce the risk of default, they limit access for users without significant cryptocurrency holdings. As a result, onchain credit currently serves primarily as a capital efficiency tool among existing asset holders rather than as a mechanism for broad financial inclusion.

Expanding support for tokenized risk-weighted assets could broaden the scope of onchain credit, but it also introduces challenges related to asset verification, legal enforceability and cross-border regulation.