Recently, the crypto community has been stirred up again by Sun Yuchen — this time the focus is not on sky-high auction items or cross-industry collaborations, but on the WLFI token, worth several billion dollars. From 'secret price crashes' to 'high-yield bait,' and then being accused of 'scale market manipulation,' if these accusations are true, it is far from a personal credit crisis; it resembles a mirror reflecting the gray operations and regulatory blind spots lurking in the field of crypto finance.
1. 3 billion pre-sale tokens + 20% annualized: Is this seemingly profitable 'trap'?
During the WLFI pre-sale phase, Sun Yuchen's side secured a huge amount of approximately 3 billion tokens, a proportion so high that it could influence market direction. On the day the tokens went live, 20% (i.e., 600 million tokens) of these chips were unlocked. In response to community concerns about a 'price crash,' he publicly promised, 'I will not sell.'
This promise stabilized market confidence, and the HTX exchange launched the WLFI staking pool, with an annualized yield of up to 20%. For investors, 'the project party does not sell + high-yield staking' is considered a 'sure-win combination' — since there is no short-term selling pressure, why not deposit the tokens in the staking pool to earn interest? Thus, hundreds of millions of WLFI continuously flowed into the exchange, and market confidence in WLFI was instantly boosted, but no one realized that this might be the start of 'gathering chips'.
It is worth noting that the economic design of the WLFI token has significant flaws. Its total supply is as high as 100 billion tokens, with approximately 24.67 billion to 27.15 billion unlocked for circulation at the start, accounting for 24%-27% of the total supply. This 'massive circulation' design itself lays a hidden risk for sell-off, and combined with the chip concentration effect of Sun Yuchen, the stability of the market is further weakened. More critically, the project party has not disclosed the lock-up incentive mechanism, leading early investors to have a strong motivation to cash out, which lays the groundwork for subsequent price fluctuations.
2. Are promises mere empty talk? Accused of 'sneaky transfers' of chips
Just when investors thought it was 'safe and sound', a rumor broke the calm: after everyone deposited WLFI into the HTX wallet, Sun Yuchen’s side was accused of secretly transferring these concentrated chips to other exchanges and then quietly selling them at high prices.
In other words, that statement 'I won’t sell' is not a lie, but rather a 'word game' — he did not directly sell the 600 million tokens he unlocked, but gathered retail chips through the staking pool and then completed the sale through 'transfer and offload'. The apparent 'market protection promise' actually turned into a smokescreen for covering the exit of funds. On-chain data shows that before being blacklisted, Sun Yuchen transferred 50 million WLFI to exchanges like Binance, although he claimed it was for 'exchange recharge testing', the market is skeptical about this.
This operational logic is not an isolated case in the crypto market. Concentrating retail assets through the staking pool and then selling them off can avoid the direct public relations risk of a crash while utilizing retail investors' psychology of chasing 'high yields' to complete chip transfers, which can be described as 'textbook-style harvesting'. More covertly, the 20% annualized staking pool launched by the HTX exchange controlled by Sun Yuchen essentially uses retail tokens as 'collateral' to provide liquidity support for his capital maneuvers.
3. The mystery of WLFI's continuous decline: not just offloading, but also 'dual harvesting'
Many investors were confused before: 'If I didn't see a large number of retail investors selling, why has the WLFI price been continuously dropping?' Now the doubts are gradually clearing up — the decline was not led by retail investors, but by the 'large funds' behind the scenes.
In addition to secretly selling chips, Sun Yuchen's side has also been accused of 'shorting' during the decline. Simply put, it is the practice of lowering prices by offloading while profiting from the downturn through shorting, forming a 'selling coins to profit + shorting to profit from declines' dual harvesting model. This also explains why WLFI remains in a downward trend even without negative news. However, AI research from on-chain analysis platform Nansen shows that Sun Yuchen's transfer actions occurred after a significant price drop, and the scale of his sell-off accounted for only a tiny proportion of the network's trading volume, possibly not the main cause of the decline.
The deeper reason lies in the market structure of WLFI. Data shows that 83% of the tokens are held by entities associated with the Trump family and early large holders, making the market highly manipulable. When early investors cash out collectively and market makers are absent, a price collapse is almost inevitable. As industry commentary points out: 'The decline of WLFI is an inevitable result of the failure of token economics design, and Sun Yuchen's actions merely accelerated this process.'
4. The dangerous logic of 'empty-handedly catching the wolf': once out of control, retail investors suffer first
Sorting out the entire operational logic resembles a high-risk 'empty-handedly catching the wolf': first relying on promises and high-yield staking to gather chips, then offloading at high prices + profiting from shorting, waiting for the WLFI price to drop to a low level, then buying back tokens to return to the staking pool, completing the 'closed loop'.
But the fatal flaw in this logic lies in 'uncontrollable prices' — if WLFI does not drop but rises, or if the rise exceeds expectations, Sun Yuchen's side may not be able to buy back enough tokens at a low price to return to the staking pool. At that time, investors in the staking pool could face the dire situation of 'tokens being emptied', with all risks borne by retail investors. This operation essentially shifts the market volatility risk entirely to ordinary investors, while the manipulators hedge their own risks through leverage and derivatives.
What is even more alarming is that such operations have a strong contagion effect in the unregulated cryptocurrency market. When 'high-yield staking' combines with 'chip concentration', it is easy to form a 'Ponzi effect' — the funds of new investors are used to pay the returns of old investors. Once market confidence collapses, the entire system will disintegrate instantly.
5. The team’s urgent 'blacklist freeze': is it a stop-loss, or a helpless 'centralized bailout'?
As the situation was about to spiral out of control, the WLFI team acted decisively: on one hand, they blacklisted the wallet of Sun Yuchen, which had unlocked 600 million tokens, prohibiting him from trading; on the other hand, they froze the remaining 2.4 billion tokens that had not yet been unlocked, completely cutting off his subsequent operational possibilities.
This action can be described as a 'public slap in the face', but it also exposes the helplessness of crypto projects — knowing that the 'blacklist' and 'freeze' violate the original intention of decentralization, if they do not do so, thousands of staking investors could instantaneously lose all their capital. Between 'ideal decentralization' and 'real user protection', the team ultimately chose the latter, prioritizing 'survival' first. Sun Yuchen responded by stating: 'Tokens are sacred and inviolable; this is the fundamental value of blockchain.' He also called on the team to respect investors' rights.
However, this centralized intervention has triggered deeper industry controversies. Some believe that the design of the WLFI team's 'administrator key' itself violates the principles of decentralization. The project party can deprive users of asset disposal rights at any time through administrative orders, which is fundamentally no different from traditional financial 'bank freezing'. CryptoQuant CEO Ki Young Ju bluntly stated: 'The WLFI foundation should be held accountable, not Sun Yuchen.'
The storm has not settled: can the 'promises' of the cryptocurrency market still be trusted?
Currently, the turmoil of WLFI is still fermenting, and the truth needs more evidence to support it, but it serves as a wake-up call for all crypto investors: in this field lacking clear regulation, 'public promises' may just be a meticulously designed performance, and high yields often hide invisible harvesting scythes.
Instead of chasing short-term high interest, it is more important to see through the chip structure, capital flow, and the true motives of the project party — after all, in the crypto world, 'capital preservation' is always more important than 'high returns', and the 'visible risks' are far less terrifying than the 'traps hidden in the dark'. Especially within China, participating in virtual currency transactions has been explicitly prohibited, and investors need to be wary of legal risks.
As industry veterans say: 'The prosperity of the crypto market should not be built on exploiting human greed. When 'decentralization' devolves into marketing rhetoric, and when 'high yields' obscure systemic risks, what we need is not more speculators, but true builders who respect the rules and investors.'
