Solend tried to take over a ‘whale’ account to stop it from collapsing the Solana system

[MrD]

• Solend, a lending platform built on the Solana blockchain, tried to gain control of a so-called “whale” account which it said was putting the protocol at risk.
• It’s an unprecedented move in the world of DeFi, which aims to recreate lending and other financial services without the involvement of intermediaries like banks.
• Solend’s users have since voted to block the move.

 

Solend is a DeFi app that lets users borrow and lend funds without having to go through intermediaries.

Solend said a single whale is sitting on an “extremely large margin position,” potentially putting the protocol and its users at risk. “In the worst case, Solend could end up with bad debt,” the firm said. “This could cause chaos, putting a strain on the Solana network.”

The account concerned had deposited 5.7 million sol tokens into Solend, accounting for more than 95% of deposits. Against that, it was borrowing $108 million in the stablecoins USDC and ether.

If sol’s price sank below $22.30, 20% of the account’s collateral — about $21 million — is at risk of being liquidated, Solend said. Sol was trading at a price of $34.49 on Monday.

On Sunday, Solend passed a proposal granting it emergency powers to take over the whale account, an unprecedented move in the DeFi world.

https://www.cnbc.com/2022/06/20/users-of-defi-app-solend-block-attempt-to-take-over-whale-account.html?