A public feud between Justin Sun, the founder of Tron, and WLFI, a crypto project linked to the Trump family, has escalated after Sun denounced a new governance proposal as 'one of the most absurd governance scams' he has encountered. In a post on X, Sun accused WLFI of designing a vote that penalizes token holders who oppose the proposal, with those who vote against it risking indefinite token lockups. He also alleged that he and other major token holders had been excluded from the voting process, with around 4% of the voting power under his control frozen.
Sun questioned the legitimacy of the vote, claiming that control of the protocol rests 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 seeks to overhaul token lockups across the WLFI ecosystem, with over 62 billion tokens subject to new terms, including multi-year lockups and vesting schedules. Token holders who decline to accept the new terms would remain locked out indefinitely. The plan has drawn criticism from other investors, including Simon Dedic, founder of Moonrock Capital, who accused the project of 'rugging' early investors.
A spokesperson for World Liberty Financial defended the proposal, stating that it was designed to align participants in the WLFI ecosystem for the long term and ensure a healthy market supply. The backlash marks the latest episode in the deteriorating relationship between Sun and WLFI, which has been building for months.
Earlier this week, WLFI threatened legal action against Sun, who had accused the project of exploiting users through DeFi transactions. The dispute has its roots in September, when WLFI blacklisted a blockchain address linked to Sun, and has intensified since then, with tensions rising after WLFI deposited its own tokens into a lending protocol and borrowed stablecoins, causing the token price to plummet.