Trump family's DeFi project embroiled in governance controversy! World Liberty Financial denies allocating 7% tokens to Aave, AAVE price falls by 2%.

The DeFi project World Liberty Financial (WLFI), associated with US President Trump, is facing a significant governance turmoil. In response to rumors regarding the proposal "Aave will receive 7% of the total supply of WLFI tokens (worth nearly $3 billion)," the WLFI team explicitly denied it to Wu said Blockchain, calling it "false news." However, Aave founder Stani Kulechov immediately stated that the proposal had been approved by DAO vote and that WLFI had indicated consent. The conflicting statements from both sides have caused market turbulence, with AAVE experiencing a short-term big dump of 2%. The industry questions the credibility of the decentralization governance protocol and the lack of legal framework.

1. Event Background: WLFI Token Transferable Plan Triggers Governance Proposal Retrospective World Liberty Financial (WLFI), as a DeFi project associated with Trump, recently announced that its Token will start trading in September, quickly sparking community speculation about its potential collaboration with the top lending protocol Aave. The controversy centers around a 2024 Aave governance proposal, which mentions that Aave may receive 7% of the total supply of WLFI tokens (valued at nearly $3 billion at current estimates), and that 20% of the protocol revenue after WLFI integrates Aave v3 will be allocated to the Aave governance layer.

II. Statement Conflict: WLFI Denies vs Aave Founder Insists Protocol is Valid The WLFI team urgently refuted the claim through Wu Shuo Blockchain, stating that the statement about the 7% Token allocation is "completely false fake news." However, Aave founder Stani Kulechov countered on the X platform, stating that the proposal has already been voted on in the Aave DAO, and WLFI had previously "signaled agreement." This public confrontation exposes the vulnerabilities of information synchronization and commitment constraints in decentralized governance.

3. Market Immediate Reaction: AAVE Price Volatility Intensifies, Investor Confidence Shaken According to BeInCrypto data, AAVE experienced significant fluctuations after conflicting statements from both parties, with prices oscillating between $343.63 and $367.73, ultimately falling by 2% to $346.15. Analysts point out that governance uncertainty directly impacts market sentiment, especially when involving politically affiliated projects, where compliance risks and reputational risks are amplified.

4. Deep Industry Impact: DeFi Cooperation Urgently Needs Legal Framework Constraints Crypto analyst Figue warned that "there is a reason for the existence of a large number of legal documents in traditional finance... If this is true, future DeFi business development will inevitably move towards stricter contracting." This controversy reflects the hidden dangers of the lack of legal support in decentralized governance, especially when projects involve political resources and large capital allocation.

5. Challenges for WLFI's Future: Crisis of Reputation Management Before Token Sale As Aave, with cumulative deposits exceeding 3 trillion USD, maintains its industry position without fundamental upheaval, the pressure faced by WLFI has significantly intensified. Market observers believe that the project's ability to properly address the gap between governance commitments and real-world execution before the token issuance will directly impact Trump's credibility in the crypto space.

[Conclusion] When "code is law" encounters disputes of rights and responsibilities in the real world, DeFi governance once again exposes its inherent vulnerabilities. The WLFI and AAVE Rashomon incident is not just an ordinary market fluctuation but will become a key case for testing the maturity of decentralized governance protocols—regardless of the outcome, the DeFi industry needs a more transparent collaboration framework and more rigorous legal constraints.