A heated public argument between Tron's founder, Justin Sun, and the Trump-linked cryptocurrency project WLFI escalated on Wednesday, as Sun vehemently denounced a new governance proposal, labeling it 'one of the most absurd governance scams' he has encountered. In a detailed post on X, Sun alleged that the project has designed a vote that penalizes dissenting voices, with token holders who oppose the proposal risking indefinite token lockups. Furthermore, he claimed that he and other significant holders were excluded from the decision-making process, stating that tokens representing approximately 4% of the voting power under his control had been frozen.
Sun also questioned the legitimacy of the vote, suggesting that control over the protocol rests with anonymous wallet addresses, including a multisignature setup capable of overriding outcomes and a separate account with the power to blacklist users. 'This proposal is not about governance,' Sun stated in his post.
'It is an exercise of power by a select few who are carefully orchestrating a further consolidation of power and expropriation of assets.' 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, such as team members, advisors, and partners, would be subject to a two-year lockup followed by a three-year gradual release, alongside a 10% token burn upon opting in.
Early supporters would face 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, as per the proposal. Sun was not alone in his criticism, as Simon Dedic, founder of Moonrock Capital, stated that early investors had 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 on X, adding that the move seemed to give the project another opportunity to extract value from investors.
He also criticized 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 term,' aiming to 'optimally ensure long-term participation in our ecosystem and help maintain a healthy market supply.' The 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 escalating 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 token value to a record low, prompting Sun to publicly accuse the project of treating users as 'personal ATMs,' which triggered the latest legal threats.