Solana DeFi Platform Votes to Control Whale Account in Bid to Avoid Liquidation ‘Chaos’

Solend users voted to “grant emergency power to Solend Labs to temporarily take over the whale’s account.”

Solana Based Borrowing and Lending Service Solend

Users of Solana-primarily based borrowing and lending service Solend voted Sunday to pressure a takeover of the protocol’s largest account: a “whale” whose “extremely massive margin role” become getting, in step with Solend individuals, dangerously close to a catastrophic on-chain liquidation cliff.

The unparalleled governance vote, Solend’s first, will provide Solend Labs “emergency powers” to liquidate the whale’s vulnerable belongings (round $20 million in SOL) through over the counter (OTC) trades rather than decentralized exchanges – in which decentralized finance (DeFi) liquidations usually arise – if the price of SOL drops too low.

Solend Labs said on-chain liquidation of the whale’s position “ought to purpose chaos” in Solana’s DeFi markets. Doing so over an OTC carrier might probably keep away from such an final results. But it additionally usurps totally the clever agreement–coded protocol Solend programmatically follows for each different borrower liquidation.

Proponents of intervention argued the Solend whale changed into no traditional consumer. The account had parked 5.7 million Solana onto Solend, or over 95% of the pool’s deposits. Against that, it had borrowed $108 million in stablecoins – some distance more than anybody else.

If the liquidation rate of $22.30 SOL hit, it might be responsible for round $20 million. SOL is currently buying and selling at $32.27.

“Despite our efforts, we’ve been not able to get the whale to lessen their danger, or even get in touch with them,” the concept said. “With the manner things are trending with the whale’s unresponsiveness, it is clear movement need to be taken to mitigate risk.”

The proposal requested token holders to yea or nay the subsequent:

• Vote Yes: Enact unique margin requirements for large whales that constitute over 20% of borrows and supply emergency power to Solend Labs to temporarily take over the whale’s account so the liquidation may be completed OTC.
• Vote No: Do not anything.

Solend governance token-holders who participated voted yea with ninety seven.5% of the vote. The suggestion barely cleared a 1% quorum in the affirmative with 1.13% share.

A single yea voter made all of the difference: their account was the simplest purpose the proposal cleared the 1% mark.