Solend Takes Control Of The “Whale Wallet” To Avoid The Risk Of Liquidation
Lending platform Solend on the afternoon of June 19 posted a proposal to take control of a “whale” wallet to prevent the risk of massive liquidation.
Whale wallets are a threat to Solend
Massive liquidation is jeopardizing lending platforms. Solend lending platform of Solana system is having a “headache” with a “huge” loan order of up to 108 million USD stablecoin USDC/USDT and collateral with 5.7 million SOL, worth about 172 million USD at the time of execution articles (cost SOL 31.65 USD).
Wallet address 3oSE9CtGMQeAdtkm2U3ENhEpkFMfvrckJMA8QwVsuRbE is largest borrower of this lending platform, accounting for 25% of the project’s TVL, 95% of SOL deposited into Solend and 88% of USDC borrowed – showing the importance of this whale and the risk risks posed in the event of liquidation.
The problem lies in the fact that the above wallet address has been down since 12 days ago and any communication efforts from Solend to urge this person to pay down debt or increase collateral to minimize the risk of liquidation is hopeless.
According to Solend’s estimate, if the SOL price falls to $22.30, the loan order will be liquidated by 20% of the loan value – equivalent to about $21 million. The project is concerned that Solana’s DEX exchanges will not have enough liquidity to handle the amount of SOL released by Solend, so the project may encounter “bad debt” and have to bear the loss on its own.
Therefore, on the afternoon of June 19, Solend posted a proposal to consult the community on “managing whales’ wallets”. This is the first governance proposal in history since going live in mid-2021.
Voting results
Voting ended at around 09:34 PM on June 19, with overwhelming support up to 98.2%. Thus, the Solend community has agreed to give the project the right to take over the 3oSE “whale” wallet… and liquidate the collateral via OTC in case the SOL price approaches $22.30. A 35% whale wallet liquidation limit will also apply.
However, at the time of update, that risk is not high as SOL has continued to recover to the area of 32 USD.
This lending platform confirmed the results, and confirmed that the project did not use its SLND token fund to participate in the vote.
The controversy has not stopped when many Twitter users pointed out that out of the 1,068 million SLND votes in favor, 1 million is from a single address.
Although Solend has good intentions with the proposal, unilaterally taking control of someone else’s account goes against all DeFi principles of decentralization, setting a dangerous precedent for the future.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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Solend Takes Control Of The “Whale Wallet” To Avoid The Risk Of Liquidation
Lending platform Solend on the afternoon of June 19 posted a proposal to take control of a “whale” wallet to prevent the risk of massive liquidation.
Whale wallets are a threat to Solend
Massive liquidation is jeopardizing lending platforms. Solend lending platform of Solana system is having a “headache” with a “huge” loan order of up to 108 million USD stablecoin USDC/USDT and collateral with 5.7 million SOL, worth about 172 million USD at the time of execution articles (cost SOL 31.65 USD).
Wallet address 3oSE9CtGMQeAdtkm2U3ENhEpkFMfvrckJMA8QwVsuRbE is largest borrower of this lending platform, accounting for 25% of the project’s TVL, 95% of SOL deposited into Solend and 88% of USDC borrowed – showing the importance of this whale and the risk risks posed in the event of liquidation.
The problem lies in the fact that the above wallet address has been down since 12 days ago and any communication efforts from Solend to urge this person to pay down debt or increase collateral to minimize the risk of liquidation is hopeless.
According to Solend’s estimate, if the SOL price falls to $22.30, the loan order will be liquidated by 20% of the loan value – equivalent to about $21 million. The project is concerned that Solana’s DEX exchanges will not have enough liquidity to handle the amount of SOL released by Solend, so the project may encounter “bad debt” and have to bear the loss on its own.
Therefore, on the afternoon of June 19, Solend posted a proposal to consult the community on “managing whales’ wallets”. This is the first governance proposal in history since going live in mid-2021.
Voting results
Voting ended at around 09:34 PM on June 19, with overwhelming support up to 98.2%. Thus, the Solend community has agreed to give the project the right to take over the 3oSE “whale” wallet… and liquidate the collateral via OTC in case the SOL price approaches $22.30. A 35% whale wallet liquidation limit will also apply.
However, at the time of update, that risk is not high as SOL has continued to recover to the area of 32 USD.
This lending platform confirmed the results, and confirmed that the project did not use its SLND token fund to participate in the vote.
The controversy has not stopped when many Twitter users pointed out that out of the 1,068 million SLND votes in favor, 1 million is from a single address.
Although Solend has good intentions with the proposal, unilaterally taking control of someone else’s account goes against all DeFi principles of decentralization, setting a dangerous precedent for the future.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
Follow CoinCu Youtube Channel | Follow CoinCu Facebook page
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