深度调查 | WLFI 的“去中心化”幻影：特权代码、利益冲突与一场非典型危机

Under the banner of "Decentralized Finance (DeFi)" and leveraging unprecedented celebrity status and political clout, World Liberty Financial (WLFI) has captured the attention of global capital since its inception. However, as of mid-2026, the token's price has plummeted over 80% from its all-time high. As the wealth myth collapses, its glamorous exterior is gradually being stripped away by on-chain data and court documents.

From the highly controversial past of its operations team and alleged conflicts of interest in its tokenomics, to the recent legal tsunami triggered by freezing large holder assets using smart contract privileges, WLFI is showcasing a "centralized specimen" lacking checks and balances to the crypto world.

The Interwoven Network Behind the Scenes: Historical Grievances and Security Flaws

In the official narrative, WLFI is a grand story supported by top-tier resources from multiple parties. However, tracing its core decision-making circle reveals a clearly visible network of interests intertwined with private business disputes and compliance risks.

One core hub of this network is Ryan Fang, a growth lead who previously worked at Morgan Stanley. What truly draws attention, however, is the core team behind its marketing efforts. According to early community investigations, marketing lead Shawnc and former Poloniex executive Jiayi Li belong to a closely-knit interest group. Due to Jiayi Li's previous career, his associated team had a history of long-term commercial friction with Justin Sun. This subtle historical animosity added a complex layer of strategic maneuvering to the later rift between WLFI and its early large holders.

While historical disputes among executives can be chalked up to business rivalries, the past profiles of Zachary Folkman and Chase Herro, who are responsible for the product's daily operations, have directly raised alarms in mainstream financial media.

According to an in-depth investigation by The New York Times, before entering the crypto industry, Zachary Folkman operated a company under a pseudonym called "Date Hotter Girls LLC," whose main business was selling PUA (Pick-Up Artist) courses. His business partner, Chase Herro, has publicly described himself online as an "internet dirtbag" who "can sell anything to anyone."

What worries risk control institutions even more is the technical security of these two individuals. According to Reuters, Dough Finance, a DeFi lending platform they previously co-founded, was hacked in July 2024 due to a basic logic vulnerability in its smart contract, resulting in the theft of over $2 million in user assets.

Public court documents reveal that an investor, Jonathan Lopez, who suffered heavy losses in the incident, has formally sued Chase Herro, accusing him of fraud and breach of fiduciary duty. Bafflingly, on-chain code comparisons show that WLFI's underlying lending contract heavily reuses the old code of Dough Finance that was previously hacked, undoubtedly embedding significant security risks within the project.

Pump-and-Dump Economics: 70% Token Monopoly and CTO's Compliance Conflict

Beyond the trust crisis stemming from the team's background, WLFI's tokenomics design has been repeatedly criticized by analysts as "lacking respect for a decentralized ecosystem."

According to the WLFI whitepaper disclosed by authoritative media outlets like CBS News, out of a massive total supply of 100 billion tokens, a staggering 70% is reserved for founders, core team members, and internal service providers. Additionally, the protocol terms stipulate that the project's underlying interest entities can extract up to 75% of the net proceeds from token sales. This means that only about 5% is ultimately allocated for core product development and ecosystem incentives. This profit distribution model, heavily skewed towards insiders, has led to the stagnation of subsequent project development and sparked strong community criticism that the team is "only extracting value, not building an ecosystem."

This practice of monetizing "insider privileges" reached its peak during the "circular lending incident" in the first half of 2026.

WLFI's official advisor and CTO, Corey Caplan, also holds another identity – co-founder of the lending protocol Dolomite. In on-chain operations this April, the WLFI team deposited a massive 5 billion of its own illiquid tokens as collateral into Dolomite, borrowing tens of millions of dollars in hard currencies (USD1 and USDC). This "left-hand-to-right-hand" operation, potentially involving a conflict of interest, directly caused the utilization rate of USD1 on the Dolomite platform to skyrocket to a critical 93%. The liquidity in the pool was instantly drained, forcing numerous ordinary depositors to face a liquidity crunch, unable to withdraw their funds.

The Sword of Damocles: The Admin Key, From Business Dispute to "Code Vigilantism"

In the world of decentralized finance, "Code is Law" is an industry consensus. However, the "super admin key" pre-embedded in WLFI's smart contract has become a tool to break this consensus.

As WLFI's earliest and most crucial "white knight," entities associated with Justin Sun invested a staggering $75 million into the project. However, in September 2025, a serious disagreement arose between the two parties regarding market trading behavior and development expectations. The WLFI team publicly accused Justin Sun of shorting and market manipulation.

Facing this massive commercial dispute, the WLFI team did not prioritize conventional legal proceedings or market-based resolution. Instead, they directly activated the extremely dangerous "blacklist" and "freeze" backdoor functions within the smart contract, unilaterally and wrongfully locking up all tokens worth hundreds of millions of dollars in Justin Sun's addresses.

Between April and May 2026, fierce legal battles erupted between the two parties in California and Florida (Sun's side sued for illegal asset seizure, while WLFI countersued for defamation). During the litigation, the WLFI team even attempted to forcibly destroy Justin Sun's frozen holdings by initiating a community governance proposal. Given that his voting rights had been stripped, coupled with the aforementioned executive personal animosities, this move triggered massive backlash within the industry, widely criticized as "using the cloak of compliance for personal retaliation."

Risk Control Bottom Line and Code Tyranny: Personal Retaliation Under the Guise of Compliance

Unchecked code privileges ultimately evolved into a "code tyranny" that swept up innocent retail investors.

Astoundingly, at the onset of the full-blown dispute, HTX showed great restraint and objectivity to protect the trading rights of its massive user base, refraining from immediately delisting the WLFI and USD1 trading pairs. However, this neutrality from the exchange platform did not earn any restraint from the WLFI team. Instead, it pushed their "personal retaliation" playbook into a frenzy of indiscriminate attacks.

In early June 2026, the WLFI team once again abused the smart contract's Admin Key, under the ostensible pretext of "cooperating with UK regulatory reviews," unilaterally and forcibly froze all WLFI assets belonging to HTX users on the chain.

What makes it even more ironic is that during the same period, leading industry exchanges like Binance and OKX demonstrated industry-wide responsibility in protecting user assets, actively cooperating with HTX to complete the unfreezing and risk control exemptions for the relevant reserve addresses. Against the backdrop of the entire industry striving to mediate and protect the assets of innocent retail investors, the WLFI team's "countercurrent" actions appeared particularly glaring and resolute. To vent the personal grievances of its executive team, they unhesitatingly used unrelated ordinary HTX users as political pawns and sacrificial lambs.

This is no longer a simple business game; it is a complete case of using public office for private gain. Under the guise of compliance, turning the blade against ordinary blockchain users, WLFI has completely torn off its last fig leaf.

Conclusion: A 'Totalitarian Monstrosity' Standing Against the Entire Industry

From a team fraught with risk control issues and incredibly greedy insider token monopolization, to the indiscriminate asset freezing by abusing contract backdoors, WLFI's path of collapse provides the entire Web3 industry with a most sobering, and also most absurd, cautionary tale.

The soul of Decentralized Finance (DeFi) lies in defending transparent rules and the inviolable sovereignty of personal assets. But WLFI has proven to the world through harsh reality: when vested interests lacking reverence control the backdoors of smart contracts, code ceases to be the law protecting users and instead becomes a tool of private punishment to suppress dissent and plunder retail investors.

Ignoring the spirit of decentralization and trampling on the bottom lines of fairness and trust, WLFI has placed itself firmly in opposition to the vast majority of blockchain users and true Web3 believers. A pseudo-decentralized narrative that can deprive ordinary people of their assets at any moment, no matter how dazzling its political halo, is destined to be rejected by this era.