A public feud between Justin Sun, founder of Tron, and WLFI, a crypto project linked to the Trump family, has intensified after Sun publicly denounced a new governance proposal by WLFI. Sun expressed his concerns on X, stating that the proposal is 'one of the most absurd governance scams' he has encountered, as it allegedly punishes token holders who vote against it by locking their tokens indefinitely. He also claimed that he and other significant holders have been excluded from the voting process, with roughly 4% of the voting power under his control being frozen. Furthermore, Sun questioned the legitimacy of the vote, suggesting that control over the protocol lies with anonymous wallet addresses, including a multisignature setup that can override outcomes and a separate account with the power to blacklist users.
The proposal in question aims to overhaul token lockups across the WLFI ecosystem, affecting over 62 billion tokens with new terms including multi-year lockups and vesting schedules. Insiders, such as team members and partners, would face a two-year lockup followed by a three-year gradual release, alongside a 10% token burn upon opting in. Early supporters would have slightly shorter vesting terms but no burn, with up to 4.5 billion tokens potentially being permanently destroyed. Holders who do not accept the new terms would remain locked indefinitely.
Simon Dedic, founder of Moonrock Capital, also criticized the proposal, stating that early investors had been 'rugged' by the Trump family. In response, a World Liberty Financial spokesperson stated that the proposal was designed to align all participants in the WLFI ecosystem for the long term, ensuring optimal long-term participation and healthy market supply. The backlash marks the latest episode in the deteriorating relationship between Sun and WLFI, with tensions building over the past few months. Earlier this week, WLFI threatened legal action against Sun, who had accused the team of exploiting users through DeFi transactions.
The dispute has been escalating since September, when WLFI blacklisted a blockchain address linked to Sun, and intensified after WLFI deposited its own tokens into a lending protocol and borrowed stablecoins, triggering a significant drop in token value.