Broader crypto lending and strike markets have recently experienced one of the worst crises in history amid a wave of liquidations. On Sunday, the Solana-based “decentralized” lending platform Solend launched an SNLD1 proposal to take over a whale account with emergency powers and avoid a cascade of potential liquidations.
Solend claimed that a whale initiated an extremely large margin position that would liquidate 20% of their loans, as much as $21 million, if the SOL price crashed below $22.30. This would put all users of the Solend protocol at risk. “This can create chaos and put pressure on the Solana network,” Solana noted.
However, this caused a huge outcry in the crypto space due to its ability to manage a whale account as it is a “decentralized” protocol. But the interesting thing was that Solend has 97.5% votes (1.15 million) in his favor.
But the good thing is that the crypto market is showing a sign of relief after the weekend crash. Solana (SOL) has recovered 6.5% as of writing and is trading above USD 32.05. This temporarily puts the liquidation risks of the whale account at Solend aside.
Solend comes with a new proposal SLND2
In the latest announcement, Solend said they have been listening to the community. For example, the lending platform has submitted a new proposal SLND2 in which it is decided not to overtake the emergency powers on the whale bill. The announcement reads:
“We have listened to your criticism of SLND1 and the way it was implemented. The price of SOL has been steadily increasing, giving us some time to gather more feedback and consider alternatives.
We recognize that a 1-day voting time is still short, but we need to act quickly to address the systemic risk and the fact that normal users cannot withdraw USDC. We are committed to protecting user funds, transparency and doing the right thing.”
The SLND2 also received over 98% votes, or more than 18,000 votes in their favor.
Bhushan is a FinTech enthusiast and has a good flair in understanding financial markets. His interest in economics and finance draws his attention to 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 his spare time, he reads thriller-fiction novels and sometimes explores his culinary skills.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or the publication is not responsible for your personal financial loss.
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