A public spat between Justin Sun, founder of Tron, and WLFI, a crypto project linked to Trump, has intensified after Sun publicly denounced a new governance proposal as 'one of the most absurd governance scams' he has encountered. In a detailed post, Sun claimed that the proposal is designed to penalize token holders who vote against it, with their tokens potentially being locked indefinitely.
He also alleged that he and other major holders have been excluded from the voting process, with around 4% of the voting power under his control being frozen. Sun questioned the legitimacy of the vote, suggesting that control of the protocol actually rests with anonymous wallet addresses, including a multisignature setup that can override outcomes and another account with the power to blacklist users.
Sun stated, 'This proposal is not governance, it's an exercise of power by a select few who are engineering a further power consolidation and property expropriation operation.' The controversy centers on WLFI's 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. 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. Simon Dedic, founder of Moonrock Capital, also criticized the move, stating that early investors had effectively been 'rugged' by the Trump family themselves.
A spokesperson for World Liberty Financial defended the proposal, saying it was designed to 'further align all participants in the WLFI ecosystem for the long-run' and 'optimally ensure long-term participation in our ecosystem and help ensure healthy market supply.' The backlash marks the latest episode in the deteriorating relationship between Sun and the project, which has been escalating 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 began in September when WLFI blacklisted a blockchain address linked to Sun, which held around $107 million worth of its governance tokens at the time. Tensions intensified after WLFI deposited 5 billion of its own tokens into lending protocol Dolomite and borrowed roughly $75 million in stablecoins, triggering a 12% drop in the token's value to a record low.