Whale on Solend strikes fear into the hearts of men
Borrowing and lending service Solend saw users voting on a forceful takeover of the largest account on the platform. The account were accounts of a few whales. A whale is a user with an extremely large margin position. The whale account was very close to what would be known as a catastrophic on-chain liquidation.
This is the first type of governance vote on Solend and it will grant Solend Labs “emergency powers” which will allow Solend to carry OTC or over-the-counter trades of the whale’s vulnerable assets instead of Decentralized exchanges if the price of SOL drops too low. Currently, the whales have vast amounts of SOL, one has over $107 million in SOL.
Solend Labs has warned against on-chain liquidation causing chaos in the DeFi markets of Solana thus an OTC service may be a better solution to avoid such an outcome that could cripple SOL completely. This OTC method would go against the smart-contract protocol to get things done however. There are those that think this marks the end of Solana and warn those holding to get out as soon as possible, but Solend believes this can all be saved if their plan works correctly.
The team at Solend acted quickly and the founder of the platform asked DM a whale that had a close total of (USDC+USDT) $107 Million with 5.7 Million SOL ( $167 Million ). The account has an automatic liquidation set as soon as SOL hits $22.27 which seems. to be on the horizon. Solana dex has low liquidity and that means that a liquidation this large can trigger an entire chain liquidation thus affecting all of Solana DeFi. At the time of this writing the whale has yet to reply to the requests of the founder for communication.
Upon this issue, Solend created a vote that was placed in front of the governance holders that participated. The vote passed with 97.5% approval. As stated earlier the whale in question had over 95% of the pool’s deposits and was borrowing. large amount in stablecoins and if there was a liquidation the account would be liable for about $20 Million. At the time of this writing SOL is trading for $34.91