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. However, facing strong opposition from the community, the Solend team decided to open a new proposal to “nullify” the old one.
Solend wants to take control of “whale wallets”
On the afternoon of June 19, Solend posted a proposal for public opinion on the next move. This is the first governance proposal in Solend’s history since going live in mid-2021.
Specifically, the project wants to:
– Imposing a new margin for whales. Any account that borrows 20% or more of Solend’s Main Pool value will only be liquidated if the collateral value drops to 35% from the original level, instead of 85% as before.
– Give the Solend team “emergency power” to take control of the 3oSE wallet account… and conduct asset liquidation if necessary via OTC partners instead of Solana’s DEX production. This permission will be revoked when the 3oSE wallet… returns to a safe state.
Outrageous opposition from the community
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. 35% whale wallet liquidation limit will also apply.
Despite claiming not to use the SLND token fund to participate in the vote, many Twitter users pointed out that out of the 1,068 million SLND voted yes, 1 million came from a single address.
While 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.
Some people think that this is a “market failure” and should be kept as a lesson.
After receiving enough criticism from the crypto community, the Solend team on the morning of June 20 posted a new proposal, which wants to:
– “Valid” the results of the vote on the evening of June 19;
– Increase the voting time for the following times to 1 day;
– Find a new solution to not have to take control of whale wallets.
In addition, since the SOL price is no longer in the “danger zone” that threatens to liquidate whale positions, the Solend team considers their “extreme measure” to be no longer necessary.
This proposal is being voted on and is expected to close at around 02:20 PM today (June 20). Currently, the number of votes in favor is also overwhelming.
However, it immediately received ridicule from the community, partly because of the final result of the previous vote when 1 wallet voted up to 1 million SLND for the proposal to take control of the whale wallet out of a total of 1.1 million votes agree.
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