Due to a wave of liquidation crises, crypto lending and staking markets are going through one of worst periods in its history.
On Sunday, June 19th, Solend – a Solana- lending platform – is facing a similar liquidation crisis. Leading to them initiating a “SNLD1 proposal”. This is done to take over a whale account with emergency powers and stop a chain of possible liquidations on their ecosystem.
Solend, the acclaimed “decentralised” lending platform, said a “whale” had opened a huge margin position on the network that would force them to pay back 20% of their loans, or $21 million if the price of SOL fell below $22.30. This puts Solend users and the network as a whole in a very difficult position.
“This could cause chaos and put a strain on the Solana network,” said the company.
Furthermore, this has caused a huge uproar in the crypto world because a “decentralised” protocol (as claimed by the team) shouldn’t be able to control any user account, let alone a “whale” account. Interestingly, the SNLD1 proposal had millions of votes from the community in its favour.
Amidst this uproar and the crypto market crash over the week, the good news is that the whale liquidation crisis has had no negative effect on the SOLANA (SOL) token. Furthermore, according to crypto data tracking system, Coingecko, the Solana token (SOL) has been gaining 6.5% and is trading above $32.80. This uptick has put the risk of the whale account liquidation at Solend on hold for now.
A New Proposal: SLND2
However, Solend has an announcement since, a new voting proposal, by way of SNLD2. One of the network’s co-founders, who goes by the pseudonym Rooter, discussed the move in a blog post on the network’s website: “We recognise that a voting time of one day is still short, but we need to act swiftly to address the systemic risk and the fact that normal users can’t withdraw USDC.
Binance has stopped supporting Circle’s USDC, Paxos’s Pax Dollar (USDP), and TrueUSD (TUSD) in favour of the exchange’s own stablecoin, Binance USD (BUSD). Conversions to
“We ask our community to participate in governance in the next few days. Will revisit the voting time in a future proposal.”
A “yes” vote on SLND2 will mean that the first vote is null and void. The voting duration should exceed 24 hours; and a plausible solution to address the whale liquidation crisis should be proffered as soon as possible.
This new proposal has been put to the community. Ultimately, garnering a largely positive response thus far.
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