Solana-based lending Platform Solend Steps Back from Controlling the Whale Account

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CoinGape
12w ago2022-06-20

The broader crypto lending and the staking markets have been undergoing one of the worst crises in history amid a wave of liquidations recently. On Sunday, Solana-based “decentralized” lending platform Solend initiated an SNLD1 proposal to take over a whale account with emergency powers and avoid a cascade of possible liquidations.

Solend claimed that a whale had initiated an extremely large margin position which would liquidate 20% of their borrows, a staggering $21 million, if the SOL price crashed under $22,30. This would put all of the users of the Solend protocol at major risk. “This could cause chaos, putting a strain on the Solana network,” noted Solana.

However, this raised a huge outcry in the crypto space for its ability to control a whale account, considering that it’s a “decentralized” protocol. But the interesting this was that Solend, has 97.5% votes (1.15 million) in its favor.

But the good thing is that after the weekend crash, the crypto market is showing a sign of relief. Solana (SOL) has recovered 6.5% as of press time and is trading above $32.05. This puts the liquidation risks of the whale account at Solend, temporarily aside.

Solend Comes With a New Proposal SLND2

In the latest announcement, Solend said that they have listened to the community. Thus, the lending platform has floated a new proposal SLND2 deciding not to overtake emergency powers to the whale account. The announcement reads:

“We’ve been listening to your criticisms about SLND1 and the way in which it was conducted. The price of SOL has been steadily increasing, buying us some time to gather more feedback and consider alternatives.

We recognize that a voting time of 1 day is still short, but we need to act swiftly to address the systemic risk and fact that normal users can’t withdraw USDC. We’re committed to protecting user funds, transparency, and doing what’s right”.

The SLND2 has also garnered over 98% votes i.e. over 18,000 votes in their favor.

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
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