Solend’s Users Invalidate Votes to Briefly Control a Whale Account

  • Yesterday, Solend users voted yes to take control of the largest whale account.
  • Governance proposal SLND1 was passed with 97.5% voters saying yes.
  • Due to criticisms, the Solend team posted a new proposal today to invalidate SLND1. SLND2 passed with over 99.8% who voted yes.

Users of Solend, a lending and borrowing service platform based on Solana, voted yes to control the largest whale account to mitigate liquidation risks amid crypto meltdown on June 19.

The governance proposal was caused by the fact that the whale account and its massive margin position were presenting a threat to an on-chain liquidation. Reportedly, the whale had 5.7 million SOL deposits and also had borrowed over $108 million in stablecoins. It controls over 95% of the main pool deposits and 88% of the USDC borrowing pool. 

If the price of SOL hits $22.30, the borrowings of the whale becomes liquidatable for up to 20%. This scenario would create turmoil in the market and could lead solend to have a bad debt, and hurt the entire Solana network.

As per the proposal, the team tried to contact the whale via Twitter and on-chain messages. Due to the whale’s unresponsiveness, the team proceeded with the decision. With 97.5% of voters saying yes, the governance was passed yesterday.

However, another governance proposal was posted a day after SLND1 was passed due to criticisms. The new proposal, called ‘SLND2’, was intended to invalidate SLND1, increase the voting time to one day, and propose to work on a new proposal that does not require “emergency powers” to take over an account.

The Solend team said they “needed to act swiftly to address the systemic risk and fact that normal users can’t withdraw USDC.” Adding that the team is “committed to protecting user funds, transparency, and doing what’s right.”

The SLND2 governance proposal was passed with over 99.8% who voted yes.

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Bryan is a gamer who became genuinely interested in crypto after his initial exposure to Play-to-Earn games like Axie Infinity and Pegaxy. He has basic knowledge of technical analysis and is keeping an eye out for interesting developments in the metaverse and GameFi space.