A heated public dispute between Justin Sun, the founder of Tron, and WLFI, a crypto project linked to the Trump family, has escalated after Sun strongly criticized a new governance proposal, labeling it as 'one of the most absurd governance scams' he has encountered. In a detailed post, Sun accused WLFI of devising a vote that penalizes those who oppose it, with token holders who vote against the proposal facing the risk of having their tokens locked up indefinitely.
He also alleged that he and other major holders were excluded from the voting process, claiming that tokens representing about 4% of the voting power under his control had been 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. 'This proposal is not about governance,' Sun stated. 'It's an exercise of power by a select few who are carefully orchestrating a further consolidation of power and expropriation of property.' The criticism revolves around WLFI's new proposal, which would overhaul token lockups across the ecosystem, affecting over 62 billion WLFI tokens with new terms, including multi-year lockups and vesting schedules.
Insiders, such as team members, advisors, 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, according to the proposal. Sun is not alone in his opposition; Simon Dedic, founder of Moonrock Capital, stated that early investors had effectively been 'rugged.' 'All the early $WLFI investors who thought they were sitting on solid profits just got rugged by the Trump family themselves,' Dedic wrote, criticizing what he described as 'blatant misconduct' with little effort to conceal it.
A spokesperson for World Liberty Financial told CoinDesk that the proposal was designed to 'further align all participants in the WLFI ecosystem for the long-run,' aiming to 'optimally ensure long-term participation in our ecosystem and help ensure a healthy market supply.' This backlash marks the latest episode in the deteriorating relationship between Sun and the project. Earlier in the week, WLFI threatened legal action, claiming it had 'contracts' and 'evidence' after Sun accused the team of exploiting users through DeFi transactions.
The dispute has been building for months, with tensions intensifying after WLFI deposited 5 billion of its own tokens into the lending protocol Dolomite and borrowed roughly $75 million in stablecoins, leading to a 12% drop in the tokens' value the next day. Sun then publicly accused the project of treating users as 'personal ATMs,' triggering the latest legal threats.