Justin Sun, WLFI holders oppose World Liberty lockup plan

World Liberty Financial on Wednesday proposed converting 62,282,252,205 WLFI tokens that are currently under indefinite lockups into fixed vesting schedules, prompting criticism from Tron founder Justin Sun and other large WLFI holders.

Under the proposal, tokens held by founders, team members, advisors and partners would be subject to a two-year lockup followed by a three-year linear vesting period. The plan would also require a burn of 4.5 billion WLFI. Early supporters, who together hold more than 17 billion WLFI, would face a two-year cliff followed by two years of linear vesting, with full distribution by the end of year four. The proposal states that holders who do not affirmatively accept the new schedule would remain locked indefinitely under existing terms.

The vote rules in the proposal set a quorum threshold of 1 billion WLFI, require a simple majority to pass, allow seven days for voting and include a 10-day acceptance window after the voting functionality is deployed.

Justin Sun, identified in the filing as the largest individual investor in the project, posted on social media calling the plan coercive and writing, “This proposal is not governance… one of the most absurd governance scams I have ever seen.” He said the design of the vote creates a “logical trap” that would leave opponents with their holdings locked indefinitely.

Sun further alleged that he and other large holders have been unable to participate in governance because their tokens are frozen by the team. He claimed an anonymous multisignature wallet can override on-chain votes at the contract level and that a single externally owned account can blacklist WLFI-holding addresses.

Other WLFI holders on social media echoed concerns, with some warning the token could sharply decline in value after the scheduled vesting ends in four years. Several investors said they are exploring legal options, including a potential class-action lawsuit.

Investors pointed to a transaction in which 5 billion WLFI were used as collateral on Dolomite to borrow about $75 million in stablecoins. Dolomite is co-founded by an advisor to World Liberty, according to investor complaints.

The World Liberty team dismissed the transaction and governance concerns as “FUD” and has not publicly addressed the broader criticism of the proposal. Requests for comment from the project were not returned.

The proposed changes would affect tens of billions of WLFI tokens and would alter when large holders can access and transfer token balances over the next several years.