Unusual: Risk of liquidation – A whale creates panic in Solend and Solana

The account in question had deposited 5.7 million sol tokens on Solend, or more than 95% of the deposits. In return, he borrowed $108 million in stablecoins USDC and in Ether.

BREAKING NEWS 🚨: 🔸The #Solana-based Solend protocol has voted to temporarily control a whale’s wallet to mitigate liquidation risks.

If the price of SOL drops and whale liquid, according to Soland, the lending platform may “end up with unhealthy claims” and put pressure on the Solana network as a whole.

Some users were outraged when the idea of ​​controlling the whale’s account was accepted, deeming it to go against the principles of DeFi.

The Soland team thus proceeded to a second governance proposal vote to invalidate the previously approved plan after the community denounced this action, calling it contrary to what DeFi should be and simply illegal. With 1,480,264 votes in favor of rejecting the SLND1 proposal, it was defeated.

The new plan overrides the previous vote and forces Solend to come up with a solution that doesn’t include the forced takeover of a user account. It also reduces the time it takes to vote on governance one day.

This scenario put the crypto-lending platform in a difficult position. Solend just might save Solana from a meltdown by taking control of the whale account. However, it would show that the assets of could be seized inside its ecosystem. This does not encourage investment.

Read also Solana (SOL): 5 fundamental points that you absolutely must know before thinking about investing in SOL

The solution – SLND3

The suggestion of SLND2 overriding SLND 1, was overwhelmingly accepted by 99.8% of users in the community. Additionally, the new plan removed Soland Labs’ emergency capabilities to take control of an account.

Solend, Solana’s green lending protocol, released a new SLND3 proposal, expressing that to solve the liquidation problem of the giant w Read more👇 https://t.co/iyoYYvqxgf

In addition, the protocol introduced the SLND3 proposal on Tuesday intended to avoid a liquidity crisis. This includes, among other things, the temporary reduction of the maximum liquidation closing factor from 20% to 1%. This limits the amount that can be liquidated in a single transaction. SLND3 will be put to the vote by Wednesday.

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