A Solana-based lending protocol, Solend has passed a new vote to nullify the earlier vote that gave Solend access to whale’s wallet to prevent liquidation.
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Solana Defi platform is not an exception to the current market’s situation, in its quest to prevent liquidation, it’s launched a governance vote on Sunday called “SLND1: Mitigate Risk From Whale,” a proposal that will allow Solend to reduce the risk the whale’s liquidation poses to the market by allowing the Defi Platform access the whale’s wallet and letting the liquidation happen over the counter.
The earlier vote “SLND1” was prompted by the fact that if SOL drops in price and the whale gets liquidated, Solend may, however, “end up with bad debt” and resultantly strain the network. A proposal that was approved of which later triggers criticism from community members.
In response to the critics, the Solend team however reorganized a new governance proposal vote called “SLND2” to overturn the initial vote, in the SLND2 vote, the Solend team saw a 1,480,264 “yes” votes and 3,535 “no” votes with a majority of 99.8%, thereby neutralizing the earlier SLND1 votes. In fact, a wallet paid $700,000 for additional voting power, ultimately making up 90% of votes.
The new governance vote was also extended for one day, “We recognize that a voting time of 1 day is still short,” a blog post by co-founder Rooter said, “but we need to act swiftly to address the systemic risk and fact that normal users can’t withdraw USDC.”
However, the Solend team has been left with no option but to “work on a new proposal that does not involve emergency powers to take over an account.”
The whale in question here is the Defi platform’s largest user, a user who is said to have deposited 5.7 million SOL, a deposit that accounts for over 95% of all Solend’s deposits to borrow about $108 million worth of USDC and USDT.
In a report by Solend, if SOL drops to $22, the wallet would be at risk of getting liquidated for up to 20% of its borrowing.
Solana native token, SOL is currently around $35, which is a 12% increment from its last 24 hours price.
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