Peter Smith
SUI (SUI), the native token of the Sui blockchain, saw a significant price jump following the announcement of its partnership with World Liberty Financial (WLFI), a DeFi protocol with connections to the Trump family.
SUI (SUI) Chosen for WLFI's "Macro Strategy" Reserve
Sui, a layer-1 blockchain developed by San Francisco-based Mysten Labs, announced on March 6 that it had formed a strategic partnership with World Liberty Financial (WLFI). As part of this collaboration, SUI (SUI) will be included in WLFI's "Macro Strategy" strategic token reserve, and both organizations will explore product development opportunities together.
The partnership has attracted significant attention in the cryptocurrency community, not only for its technical implications but also due to WLFI's political connections. While WLFI maintains that none of Trump's family members hold an official officer or director position within the company, Eric Trump, son of US President Donald Trump, serves as one of the board managers.
Industry observers have noted that the inclusion of SUI (SUI) in WLFI's reserve isn't entirely surprising, as Eric Trump has publicly expressed support for the cryptocurrency and personally holds SUI tokens in his portfolio.
SUI (SUI) Market Performance and Ecosystem Growth
The Sui network has demonstrated impressive growth throughout 2024, with its market capitalization surging over 153% in the last quarter alone, according to data from Messari. The blockchain's DeFi ecosystem has shown remarkable expansion, with average decentralized exchange (DEX) volume increasing by an astonishing 1,591% year-over-year.
SUI (SUI) currently ranks among the top 20 cryptocurrencies by market capitalization and has established itself as a top-10 blockchain in the decentralized finance (DeFi) sector by total value locked (TVL), which stands at $1.283 billion, according to DefiLlama.
The market reaction to the partnership announcement was immediately positive for SUI (SUI), with the token's price surging 12% and briefly approaching the $3 mark before settling at around $2.85, representing a 5.7% gain from pre-announcement levels.
Industry Concerns Over WLFI's Legitimacy and SUI (SUI) Partnership
Despite the enthusiasm from the Sui community and its development team, the partnership has been met with skepticism from various industry participants who have raised concerns about WLFI's legitimacy and business model.
Much of the criticism centers on questions about WLFI's actual value proposition. Many community members have questioned whether the protocol brings anything new to the DeFi space or if it is simply repackaging existing Aave services under a different brand.
Mike Dudas, managing partner at crypto venture fund 6MV and a self-identified WLFI investor, dismissed the project as a "pay-to-play" scheme, suggesting that the protocol's business model may be based more on generating fees than providing genuine utility.
Andre Cronje, co-founder of Sonic Labs and creator of Yearn.finance, offered even harsher criticism. He highlighted WLFI's high fees and questionable reinvestment strategies that he believes extract value from crypto firms rather than providing meaningful services or innovations.
"Alan," chief marketing officer of Axia8 Ventures, echoed these concerns, stating: "Projects bend the knee and pray to the gods in hopes that by playing this game, their token might, just might, be included in a reserve. All of the above to do what? To pump the token's price."
As of publication, WLFI has not publicly addressed these criticisms. Cointelegraph reached out for comment but has not received a response.
SUI (SUI) Selection Rationale and Technical Advantages
Zak Folkman, co-founder of WLFI, explained in the announcement that SUI (SUI) was selected for its "American-born" innovation and scalability. This statement has led some investors to speculate that WLFI's next move might be to target other US-based crypto projects, particularly those that have received implicit endorsement from Eric Trump.
"Given our plans to support foundational DeFi assets in the coming months, collaborating with Sui was an obvious decision," Folkman added.
From a technical perspective, SUI (SUI) offers several advantages that make it appealing for DeFi applications. The blockchain's object-centric data model and parallel transaction execution provide a unique infrastructure compared to traditional account-based models. Sui structures assets as independent objects, enabling faster ownership transfers and instant updates without requiring full network-wide consensus. This design enhances liquidity movement, collateral management, and smart contract efficiency in DeFi applications.
WLFI's Asset Holdings and SUI (SUI) ETF Speculation
According to onchain data, WLFI holds approximately $80 million in crypto assets based on wallets tracked by Arkham Intelligence. However, a significant portion of its holdings has been transferred to Coinbase Prime, making it difficult to trace the full asset distribution.
On March 6, onchain analyst EmberCN estimated that WLFI holds a total of $336 million in crypto, including Ether (ETH), Wrapped Bitcoin (WBTC), Tron (TRX), Chainlink (LINK), Aave (AAVE), Ethena (ENA), MOVE, Ondo (ONDO), and Sei (SEI). The analyst also noted that the firm recently added $21.5 million in WBTC, ETH, and MOVE ahead of the White House Crypto Summit on March 7.
"Because these assets were transferred to Coinbase Prime by WLFI some time ago, there is no way to know whether they have been sold," EmberCN wrote in a translated post, adding that WLFI claims they have not been liquidated.
If WLFI still holds these assets, the current paper loss stands at approximately $88 million. The largest percentage loss is in ENA (-63%), while the largest monetary loss is in ETH (-$67.35 million, down 31%), EmberCN added.
Meanwhile, Sui has hinted at growing its presence in Washington, DC. On February 4, Mysten Labs co-founder Adeniyi Abiodun revealed the project was engaging in "exciting conversations" that could expand its ecosystem. A month later, Abiodun suggested that SUI (SUI) could be considered for ETF inclusion. On March 6, a Delaware filing indicated that Canary Capital may be exploring an ETF for SUI (SUI), though the industry remains cautious about premature speculation given past fake ETF filings.
Peter Smith
