The Trump family-backed project proposes to lock up 62 billion tokens under new vesting conditions and burn 4.5 billion days after using its own tokens as collateral for a $75 million loan sparked investor anger.
The suggestion
World Liberty Financial (WLFI)the DeFi project backed by the Trump family, has presented a comprehensive governance proposal to its community.
It targets 62.28 billion WLFI tokens currently locked and introduces multi-year vesting plans for two stakeholders.
Early backers who pre-purchased WLFI at $0.015 or $0.05 have approximately 17 billion tokens locked.
Under the proposal, they would move to a two-year cliff, followed by a two-year linear vesting. Incineration would not apply to this group.
Unlocking would begin no earlier than early 2028 and extend beyond January 2029, when Donald Trump’s second term as president ends.
Founders, team members, advisors and partners collectively hold 45.24 billion tokens. Their conditions are stricter.
To opt in, you must accept an immediate destruction of 10% of your allocation of approximately 4.52 billion tokens destroyed on-chain, followed by a two-year cliff and a three-year linear lock-up period for the remainder.
Any Insider who declines will be banned indefinitely but retains governance rights.
“This is the worst case unlock period in this proposal and is subject to a mandatory burn upon registration.” — World Liberty Financial, official X contributor
Why now?
It’s hard to separate the timing from the recent controversy.
Just days before the proposal was publishedCoinDesk reported that WLFI used 5 billion of its own tokens as collateral for Dolomite, a lending protocol co-founded by WLFI’s CTO, to borrow $75 million worth of stablecoins.
The following day, the tokens fell 12% to a record low.
Critics drew comparisons to previous DeFi failures involving founders’ self-collateralization.
WLFI dismissed the concerns, saying its loan position was not at risk of liquidation and that it would post more collateral if the token’s price continued to decline.
The project was recognized that WLFI now plays a central role in how it finances itself and meets community expectations.
To add to the pressure, the project acknowledged a problem of governance participation.
In six previous votes, between 2.7 and 11.1 billion tokens voted, leaving the majority of the locked supply inactive.
The new proposal forces a choice: accept a long lock-up period or remain locked without a liquidity path.
The Justin Sun Feud
The most explosive dimension of the controversy concerns Tron founder Justin Sun, once WLFI’s largest external backer after investing $30 million at the end of 2024.
In a detailed post on X on April 13thSun accused WLFI of incorporating a hidden backdoor blacklisting feature into its token smart contract that can freeze, restrict, or effectively confiscate the assets of any holder without community consent.
Sun described himself as “the first and greatest victim” He pointed to his wallet, which has reportedly been frozen since September 2025, after he transferred around $9 million in WLFI tokens.
His holdings, valued at 545 million tokens, have lost over $80 million in value since the freeze, reflecting WLFI’s overall decline.
According to reports, the original token contract launched in September 2024 did not have a blacklisting feature.
A blacklist feature was added in August 2025almost a year after Sun’s initial investment, just before trading began.
A second upgrade in November introduced a “batch reallocation” mechanism, which WLFI described as a tool to recover stolen or compromised funds.
“This is not a vote, it is coercion… the outcome was decided before the vote even began.” — Justin Sun, post on X, April 15, 2026
WLFI responded by calling Sun’s claims “baseless accusations” and accusing him of “playing the victim” to cover up wrongdoing.
It has been argued that the blacklist is a “regulatory compliance module” required under the CLARITY Act of 2025 to block sanctioned companies. The project’s legal department threatened a defamation lawsuit and responded publicly: “See you in court.”
Sun responded by asking the anonymous team members to publicly identify themselves.
Regarding specifically the new unblocking proposal, Sun called it “one of the most absurd governance scams” He had seen the project and called it “world tyranny.”
He claimed that holders who vote against the proposal risk being banned indefinitely, thereby structurally forcing the vote.
He also claimed that his shares, representing about 4% of the voting rights, were frozen before the vote.
Concerns about governance concentration
The data cited in reporting on previous votes shows signs of extreme concentration.
A March 2026 stake vote passed with 99.12% approval, but over 76% of participating tokens came from just 10 wallets.
WLFI requires 180 days of ownership to participate in governance, a rule that critics say curbs insiders and early whales.
The new proposal requires a quorum of 1 billion WLFI with a simple majority. Voting lasts seven days.
The team framed the proposal as an attempt to “align long-term incentives and address supply overhang concerns.”
Market reaction
The WLFI token climbed about 7% to around $0.084 in the hours following the proposal’s release, a pattern consistent with previous rallies tied to burn announcements in other tokens.
The token remains more than 75% below its all-time high of around $0.33, reached shortly after trading began in September 2025.
Current market data WLFI is estimated to have around 32 billion tokens in circulation and its market capitalization is close to $2.6 billion.
The project had spent $65.6 million on open market repurchases six months before the proposal, acquiring tokens at an average price well above current prices.
