A heated dispute between Justin Sun, founder of Tron, and WLFI, a crypto project linked to Trump, intensified on Wednesday as Sun denounced a new governance proposal 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 dissent, with token holders who vote against the proposal facing the risk of having their tokens locked indefinitely.
Furthermore, he claimed that he and other significant holders had been excluded from the process, stating that tokens representing approximately 4% of the voting power under his control had been frozen. 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. He asserted, 'This proposal is not governance; it is an exercise of power by a select few who are carefully engineering a further power consolidation and property expropriation operation.' The criticism revolves around WLFI's new proposal to overhaul token lockups across the ecosystem, affecting over 62 billion WLFI tokens with new terms, including multi-year lockups and vesting schedules. Under the plan, tokens held by insiders would face a two-year lockup followed by a three-year gradual release, alongside a 10% token burn upon opting in.
Holders who do not accept the new terms would remain locked indefinitely. Sun is not alone in his opposition; Simon Dedic, founder of Moonrock Capital, described the move as 'rugging' early investors, suggesting it gives the project another chance to extract value from investors.
A spokesperson for World Liberty Financial defended the proposal, stating it was designed to align all participants in the WLFI ecosystem for the long term, ensuring long-term participation and healthy market supply. The backlash marks the latest episode in the deteriorating relationship between Sun and the project, following earlier threats of legal action and accusations of exploiting users through DeFi transactions.