Trump-linked cryptocurrency project World Liberty Financial is facing harsh criticism from its investors as a new proposal seeks to extend lock-ups on WLFI tokens by up to four years for early supporters.

Tron founder Justin Sun, the largest individual investor in World Liberty, criticized the project in a Wednesday social media post. Sun has been engaging in an extended feud with World Liberty, stemming from the project's decision to freeze his WLFI tokens.

"This proposal is not governance," Sun wrote. "This proposal has been packaged as a 'governance alignment signal' and a 'long-term commitment,' but strip away the packaging and what you have is one of the most absurd governance scams I have ever seen."

The proposal, released Wednesday by World Liberty, seeks to convert 62,282,252,205 WLFI tokens from indefinite lockups to fixed vesting schedules. 

Specifically, the proposal said tokens held by founders, team members, advisors, and partners would face a two-year lock-up followed by a three-year linear vesting period, and would require them to burn 4.5 billion WLFI. 

Meanwhile, early supporters that collectively hold more than 17 billion tokens would face a two-year cliff followed by a two-year linear vesting period — meaning their tokens would be fully distributed by year four. 

"Holders who do not affirmatively accept the new schedule remain locked indefinitely under existing terms," the team wrote.

The proposal requires a quorum of 1 billion WLFI tokens, a simple majority for passage, and a seven-day voting period, according to the team. An acceptance window of 10 days follows deployment of the functionality.

'Logical trap'

Sun said that the proposal was designed as a "logical trap" that would lock away the tokens of holders who vote against it indefinitely.

"In other words, if you oppose this proposal, you get punished," Sun wrote. "This is not voting. This is coercion. What kind of democratic process rewards agreement and imprisons dissent?"

Sun further alleged that he and several other large holders have been forced out of this voting process because their governance tokens have been frozen by the team. 

The Tron founder also claimed that "actual control" over the WLFI smart contracts is held by an anonymous multisig wallet, and that a single externally owned account holds the power to blacklist addresses holding WLFI tokens.

"This anonymous multisig can override any vote result and execute any operation directly at the contract level," Sun said. "The so-called governance proposals, on-chain votes, and community discussions are nothing but theater." 

Wider disapproval

Sun's criticism of the new proposal was widely echoed by other crypto community members on the social media platform X, some of whom said they are looking to file a class-action lawsuit against the project.

Many users expressed that they felt coerced into accepting the proposal and voiced concern that the value of WLFI would significantly depreciate after four years, coinciding with the end of Donald Trump's presidency.

"If you hold this shitcoin, do not accept the terms," X user kripu wrote in a reply to World Liberty's X announcement. "2 years vest will end after the Trump presidency and this thing will be at $0.00 by then." 

Another X user Isonips wrote: "So we've been locked in for a year while the team has been doing whatever it wants with tokens, using them as collateral and borrowing against them … And now we have to choose between waiting another four years or staying locked in indefinitely?"

Investors in the project have expressed dissent over World Liberty's recent actions, including using 5 billion WLFI tokens as collateral on Dolomite, co-founded by a World Liberty advisor, to borrow $75 million worth of stablecoins. 

While many community members raised concerns about the suspicious nature of WLFI transactions, the project dismissed these claims as "FUD."

World Liberty Financial has yet to respond to the mounting disapproval of the latest proposal. The Block has reached out to the project for comment.