Solend continued to meet to discuss new proposals to control the risk of massive liquidation from whale wallets and proposed SLND3 after SLND1 and SLND2 were heavily criticized.
As mentioned in a Coincu News article, Solend saw a threat from a whale wallet address that was collateralizing a huge amount of SOL.
The problem lies in the fact that the 3oSE wallet… has stopped working 12 days ago and all attempts to contact Solend to urge this person to pay down debt or increase collateral to minimize the risk of liquidation are futile hope. Even Solend’s founder, 0xrooter, has taken to Twitter to urge the community to spread the news with the hope of reaching “whales” without any results from June 15 to now.
Fearing that 108 million SOL would be massively liquidated, this lending platform made the first proposal to control whale wallets. However, the response was an objection for violating the “decentralization”.
That is why SLND2 was introduced to invalidate the previous proposal. But with anxiety, SLND3 was still launched by this lending platform.
Solend’s SLND3 Proposal
On the morning of June 21, the Solend team continued to post new proposals and ask interested users to vote. This proposal has the goal of controlling the risks of borrowing money through Solend, including:
– Imposing a loan limit of only $50 million per account. Accounts that owe more than this amount will be liquidated, regardless of the collateral value. This change will be applied gradually from a debt level of $120 million and liquidation of $500,000 per hour.
– Temporarily reduce the liquidation limit from 20% of the mortgage value to 1%.
– Temporarily reducing the penalty for liquidation of SOL from 5% to 2%.
It can be seen that the new proposal will still hit the 3oSE whale wallet directly borrowing up to $108 million in stablecoins and collateral with 5.7 million SOL (valued at $201 million at the time of update with a SOL value of $35.5 million at the time of updating), forced to liquidate this account until the loan amount is only 50 million USD. However, the proposal will also affect other accounts that are borrowing heavily on Solend.
Solend stated that it is still looking for market makers and OTC units to conduct liquidation instead of putting on DEX and affecting liquidity on these platforms.
The new proposal called SLND3 will be voted on within 1 day instead of 6 hours like the previous two proposals.
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