A heated public disagreement between Tron founder Justin Sun and the Trump-linked cryptocurrency project WLFI intensified on Wednesday, as Sun strongly denounced a newly introduced governance proposal. Sun described the proposal as 'one of the most absurd governance scams' he has encountered, stating that it unfairly targets token holders who vote against it by putting their tokens at risk of being locked indefinitely. Furthermore, he alleged that he and other significant token holders were excluded from the voting process, with tokens representing about 4% of the voting power under his control being frozen.
Sun questioned the legitimacy of the vote, suggesting that actual control over the protocol rests with anonymous wallet addresses, including a multisignature setup capable of overriding outcomes and a separate account that can blacklist users. He expressed his views on the matter, saying, 'This proposal is not about governance; it's an exercise of power by a select few who are engineering a further consolidation of power and expropriation of property.' The proposal in question aims to restructure token lockups across the WLFI ecosystem, affecting over 62 billion tokens with new terms that include 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, along with a 10% token burn for opting in. Early supporters would have slightly shorter vesting terms but no burn, with up to 4.5 billion tokens potentially being permanently destroyed. Token holders who do not accept the new terms would remain locked indefinitely, according to the proposal.
Sun's criticism was not isolated, as Simon Dedic, founder of Moonrock Capital, also pushed back against the proposal, stating that early investors had been 'rugged' by the Trump family themselves. Dedic criticized what he described as 'blatant misconduct' with little effort to conceal it. In response, a World Liberty Financial spokesperson stated 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.' The backlash marks the latest development in the deteriorating relationship between Sun and the project. Earlier in the week, WLFI threatened legal action, citing 'contracts' and 'evidence' after Sun accused the team of exploiting users through DeFi transactions.
The dispute has been escalating for months, with tensions intensifying after WLFI deposited 5 billion of its tokens into the lending protocol Dolomite and borrowed roughly $75 million in stablecoins, leading to a 12% drop in token value the following day. Sun publicly accused the project of treating users as 'personal ATMs,' triggering the latest legal threats.