Solend goes Whale Hunting and Backflips
Solend goes Whale Hunting and Backflips
Decentralised Finance is supposed to be just that, a world of decentralisation with no central authority and people are left to their own. It might not be to many people's liking and people don't need to engage but that is the basics of it.
However, recently Solend provided a proposal to grant itself emergency powers to take over a whale account with their reasoning being that the whale had deposited 5.7 Million Solana tokens and borrowed over $US100 Million in stable coins equating to over 95% of the total pool.
In a rarely seen move the protocol wanted to steal the account and sell the tokens but not just to this account but to all accounts that had over 20% of pools.
Community Backs the take over
The Solana community voted in favour and the internet was in uproar but this is where things get tricky. Due to the chronic backlash from the broader community the team put up a second proposal that cancelled the take over. Although this has been done it has left a sour taste in peoples mouths.
Solend wasn't done yet with proposals and it wasn't long for a third proposal to show up limiting lending to $US50 Million and although the protocol has altered it's original position it has planted the seed of doubt with users of DeFi that the sector isn't decentralised.
As for the Whale? well he has taken his cash and placed it in another protocol but has now lowered the USD utilisation on Solend which enables participants to withdraw earnings once again.
But further questions remain relating to the financial viability of some De-Fi protocols as a single whale has had such an impact and risked the entire protocol which could have caused a further cascading impact on the broader Cryptocurrency marketcap.
No doubt this incident will make people think twice prior to depositing assets.
Image sources provided supplemented by Canva pro subscription. This is not financial advice and readers are advised to undertake their own research or seek professional financial services
Posted Using LeoFinance Beta
