USD1 faces scrutiny as Binance opens $40M WLFI airdrop

What to Know:

• Binance’s $40M WLFI airdrop rewards USD1 holders through February 20, 2026.
• Eligible USD1 balances on Binance accrue WLFI rewards, per program-specific terms.

A large exchange-led airdrop tied to a stablecoin can alter user incentives and liquidity on-platform and across secondary venues. The scale of rewards, concentration of supply, and program rules typically determine how material those effects become.

Binance is running a WLFI token distribution totaling $40 million to users who hold World Liberty Financial USD (USD1) on its platform during a four‑week window through February 20, 2026, as reported by BingX News (https://bingx.com/en/news/post/binance-unveils-m-wlfi-airdrop-for-usd-holders-jan-feb?utm_source=openai). For USD1 holders, this means on-platform balances may accrue WLFI rewards for the eligible period, subject to the exchange’s program terms and any product-specific inclusions or exclusions.

In practical terms, such distributions tend to elevate short-term demand for the qualifying asset on the host venue. The airdrop also aligns issuer and exchange incentives around USD1 adoption, while leaving longer-term utility and liquidity outcomes dependent on user behavior once incentives roll off.

Immediate impact on users and USD1 market liquidity

The concentration of USD1 on a single venue is an immediate market-structure consideration. As reported by Forbes (https://www.forbes.com/sites/zacheverson/2026/02/09/trump-stablecoin-usd1-binance-holds-87-percent//?utm_source=openai), roughly 87% of circulating USD1 is held on Binance, implying a potential single point of failure and heightening the importance of exchange-specific custody, withdrawals, and market depth for the stablecoin.

Independent researchers have cautioned that exchange-centric concentration can exacerbate downside scenarios if incentives end or access is constrained. “The levels of concentration are unusual, though not terribly surprising,” said Molly White, a crypto researcher, noting a theoretical risk if assets become inaccessible during an exchange failure or legal process.

Binance’s leadership has pushed back on the criticism, saying that the apparent concentration largely reflects user-owned assets and that similar patterns are seen with other stablecoins; World Liberty Financial has likewise rejected suggestions of undue influence. These responses were summarized by TradingView (https://www.tradingview.com/news/coinpedia%3A4e9836c88094b%3A0-cz-defends-binance-after-forbes-flags-87-holdings-in-trump-s-usd1-stablecoin/?utm_source=openai).

Policy commentary has entered the discussion as well. According to The Block (https://www.theblock.co/post/376870/binance-denies-political-motive-usd1?utm_source=openai), Rep. Maxine Waters questioned potential conflicts tied to USD1’s affiliations, while Binance.US described related listing claims as unfairly politicized and said internal processes governed the decisions across multiple U.S. venues.

For users and liquidity, near-term effects typically include higher on-platform USD1 balances and tighter spreads while rewards accrue. After the program ends, liquidity could migrate or normalize; peg stability and market depth will depend on cross-venue adoption, reserve confidence, and the breadth of trading pairs that support USD1 and WLFI.

At the time of this writing, broader crypto-exposed equities reflect a mixed backdrop. Based on data from Yahoo Finance (https://finance.yahoo.com), Coinbase Global, Inc. (COIN) closed at 164.32 on February 13 and showed subsequent overnight moves around 162.82, underscoring choppy risk conditions that can influence exchange activity and token volumes.

Eligibility and reward calculation for USD1 holders

Eligibility requires completed KYC and holding USD1 in supported products; liabilities or borrowed USD1 do not count toward rewards, and balances across Spot, Margin, and Futures are typically included, according to Ecoinimist (https://ecoinimist.com/2026/01/23/binance-launches-40-m-wlfi-airdrop/?utm_source=openai). The report also notes that using USD1 as collateral can apply a bonus multiplier of roughly 1.2x to rewards; exact calculations and any exclusions remain governed by the official program documentation.