CeFi Giant comes to the rescue
The scene was dire as many tried to contact a whale whose position on Solend could have very well spelled disaster for the platform- and the rest of Solana.
As reported in an earlier article a nightmarish situation was on the horizon last week as a wallet that was worth $107 million in borrowed USDC and $170 million in SOL used as collateral was on the verge of liquidation. The owner of the wallet was nowhere to be found and this led to a governance vote that was deemed irresponsible and illegal so that decision was ultimately overturned.
There were many attempts to reach the whale via messages on the blockchain, Twitter memes, and direct messages, all trying to alert the whale to the situation. none of them proving successful. The problem was the whale needed to add more funds to the account or reduce its position as not doing that in time would have ended Solend- and possibly Solana. The original suggestion and vote made by Solend were one of controlling the wallet and selling off the assets via auction but ultimately this was seen as deeply lacking in morals and caused quite a stir on platforms such as Twitter.
During all of this drama, it was Binance that stepped in and saved the day. Binance was able to alert the whale when others couldn’t by delivering a message on the behalf of the co-founder of Solend. The whale apologized for the confusion and any issues caused and said there were no hard feelings for the original governance vote. The whale then began redistributing the assets into other DeFi outposts like Mango Markets thus ending the drama without any liquidation.
Those that are wondering how this even could be possible need simply look at the rules of Solend. The platform does not set limits on the size of the borrower which resulted in the platform’s majority of SOL collateral being held by one person. Solana smart contracts automatically send liquidation orders to DEXs when the collateral falls too low there is no action set in place to see if the trade will crash the market or not.