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Solend Whale Moves $25M to Another Platform Despite Canceled Plans to Seize Their Wallet

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Solend, a DeFi lending protocol built on the Solana blockchain, attempted to take over a whale account that could allegedly create problems for the protocol due to the colossal amount of collateral that could be liquidated. After the crypto community criticized the DAO for Solend’s approval of such a proposal, the organization soon put forward a second proposal aimed at overwriting the first and received its approval with the support of 99% of voters.

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A few hours later, the whale transferred some of its funds to mitigate the risks.

The threat of mass liquidation

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AT Thread on Twitter On Sunday, Soland asked the DAO for permission to “temporarily take over control of the whale’s account so that the liquidation can be done OTC and not push Solana to the limit.” Meanwhile, he promised that as soon as the SOL whale’s position was not in immediate danger of liquidation, emergency power would be canceled accordingly.

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The announcement appeared on the platform, spotting a whale who invested 5.7 million SOL, which is more than 95% of Solend’s liquidity, to take out a loan of 108 million USD and USDT. At the same time, if SOL falls from the current price to $22.3, up to 20% of his position may be liquidated. As a result, this could cause a liquidity crisis in the protocol, further exacerbating the asset’s decline as fear reigns in the Solana community.

Soland attributed his unusual measure to the urgency of the matter and the inability to contact the whale directly. When the proposal was accepted quickly (within six hours), Solend immediately received a backlash from the crypto community and under pressure proposed cancel this, with an increased amount of voting time to 24 hours.


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“We understand that 1 day voting time is still short, but we need to act quickly to address systemic risk and the fact that regular users cannot withdraw USDC.”

The proposal, which was eventually passed with 99% of voters saying yes, noted that a new proposal not involving “emergency account takeover powers” would be available soon.

Community response and fund transfer

When the first proposal was passed, allowing the protocol to seize the whale’s collateral and sell it OTC, Solend was criticized for stealing users’ assets and operating against DeFi’s immutability and permissionlessness principle.

Crypto community veteran Jordan Fish — Kobe — made fun of the incident on Twitter. tweet:

Bitcoin bull Lynn Alden later added fuel to the conversation with a retweet: meaning that this project is just one of the many scams that followed the invention of Satoshi Bitcoin.

A day later Soland updated that the whale transferred $25 million in US dollars to the Mango markets in order to spread its credit position to other similar platforms.

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Credit : cryptopotato.com

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