Today we won't talk about gold-silver ratios, nor about the Japanese and Korean indices. Let's talk about something more exciting than candlestick charts—Sun Yuchen and WLFI are at each other's throats. The project party and early investors have turned against each other, pointing fingers and cursing.
For someone like me who watches candlestick charts in a storage room, this is more substantial than any technical analysis. What is revealed behind it is more valuable than price fluctuations.
The backyard is on fire, dogs biting dogs
The incident began on April 12, when Sun Yuchen suddenly attacked on social media, accusing the DeFi project endorsed by the Trump family#WLFI of secretly implanting a hidden 'blacklist backdoor' in its token contract. Sun Yuchen claimed that this hidden backdoor blacklist feature grants the project party the unilateral power to freeze, restrict, or even confiscate the assets of any token holder without notice, reason, or any remedial measures. His exact words were: 'This is a trap disguised as an open door.'
A so-called decentralized financial project hides such a universal key behind it—this is not just a matter of business ethics; it is a blatant provocation against the bottom line of blockchain technology.
Sun Yuchen also claimed that his wallet was blacklisted as early as September 2025, with approximately 545 million tokens frozen. The initial investment of $75 million has now dropped to less than $50 million. He stated that he is the 'first and biggest victim' of this blacklist mechanism. In a post, he wrote: 'All the actions taken by the WLFI team, such as withdrawal fees, secretly implanting backend controls, and unjustly freezing investors' funds, have not gone through a fair and transparent community governance process. The so-called governance votes not only concealed key information but also had predetermined outcomes.'
In Sun Yuchen's narrative, this is a story where an early supporter passionately invested real money, only to become a victim.
"See you in court, brother"
In response to Sun Yuchen's accusations, the WLFI team's reply was quite strong. They did not directly answer whether there was a backdoor but instead hit back on social media with four words: 'See you in court, brother.'
WLFI stated in response that Sun Yuchen's actions are 'playing the victim while using baseless accusations to cover up his own misconduct,' and claimed, 'We have contracts, we have evidence, we have the truth.'
Minutes later, Sun Yuchen posted again, demanding that those behind WLFI step forward and reveal their identities, 'do not hide in the shadows.' You punch me, I kick you; thus, the most expensive drama in the crypto circle is born.
$75 million lending game has dropped over 80% from its peak.
Another trigger for this verbal battle is a major blunder WLFI recently made on-chain.
On-chain data shows that WLFI borrowed about $75 million in stablecoins through the DeFi lending protocol Dolomite, using its own issued WLFI tokens as collateral. The most outrageous part of this loan is that Corey Caplan, the co-founder of Dolomite, is also the Chief Technology Officer of WLFI. What is he using the borrowed money for? No one knows.
Currently, about 5% of WLFI's supply is locked as collateral in Dolomite. If WLFI's price continues to fall, these collaterals may be liquidated, forcing the WLFI team to sell more tokens to pay off debts, creating a vicious cycle. The utilization rate of Dolomite's USD1 stablecoin lending pool has reached 93%, leaving only $12.5 million in available liquidity for depositors. More outrageously, while engaging in such a cycle of collateralized self-lending, WLFI also plans to establish a unlocking schedule for the 80% WLFI tokens held by early investors. Once unlocked, a new batch of supply will hit the market.
Austin Campbell, a professor at NYU Stern School of Business, summed it up in one sentence: 'Essentially, the WLFI team is dumping on retail investors.'
Back to the token price. Currently, WLFI is trading at about $0.077, down over 82% from its historical high of $0.46 in September 2025. Its market cap has shrunk from about $427 million at its peak to around $250 million. In four days, it has plummeted by 21%, hitting a historical low. #TRUMP The token has dropped from a high of $73 to $2.8, with 40 million tokens set to unlock all at once on April 18, representing about $320 million in supply hitting the market. MELANIA has dropped from $13 to $0.11, a 99% decline, and the project team has been silent for a year. USD1 was depegged once in February.
Now Sun Yuchen and the WLFI team have turned against each other, which highlights a truth: political narratives can reap benefits temporarily, but the cover will eventually be torn away.
My hedging framework: do not bet on human nature, only bet on structure.
I do not bet on who will win or lose in the lawsuit between Sun Yuchen and WLFI, nor do I bet on whether the price will rise or fall after the unlocking on April 18. I only bet on one iron rule: assets with collapsed credit will only accelerate to zero.
My hedging framework has never changed—long $BNB , long gold $XAUT , short the whole family bucket. Collecting rent while resisting uncertainty. Political narratives will fade, but the unblocking and selling will not stop.
This is also the intention behind my persistence at Binance Square to record real trades and refuse to showcase fake orders. I hope everyone can pay attention to me and discuss real quantitative hedging and risk control together. Comment with '**Alliance**' and send your operational manual. No charges, no courses.
