Quote:Users of Solana-based borrowing and lending service Solend voted Sunday to force a takeover of the protocol's largest account: a "whale" whose "extremely large margin position" was getting, according to Solend contributors, dangerously close to a catastrophic on-chain liquidation cliff.
The unprecedented governance vote, Solend's first, will grant Solend Labs "emergency powers" to liquidate the whale's vulnerable assets (around $20 million in SOL) via over-the-counter (OTC) trades instead of decentralized exchanges – where decentralized finance (DeFi) liquidations usually occur – if the price of SOL drops too low.
Solend Labs said on-chain liquidation of the whale's position "could cause chaos" in Solana's DeFi markets. Doing so over an OTC service would likely avoid such an outcome. But it also usurps entirely the smart contract–coded protocol Solend programmatically follows for every other borrower liquidation.

Proponents of intervention argued the Solend whale was no typical user. The account had parked 5.7 million SOL onto Solend, or over 95% of the pool's deposits. Against that, it had borrowed $108 million in stablecoins – far more than anyone else.
If the liquidation price of $22.30 SOL hit, it would be liable for around $20 million. SOL is currently trading at $32.27.
"Despite our efforts, we've been unable to get the whale to reduce their risk, or even get in contact with them," the proposal said. "With the way things are trending with the whale's unresponsiveness, it's clear action must be taken to mitigate risk."
The proposal asked token holders to yea or nay the following:
Vote Yes: Enact special margin requirements for large whales that represent over 20% of borrows and grant emergency power to Solend Labs to temporarily take over the whale's account so the liquidation can be executed OTC.
Vote No: Do nothing.

Solend governance token-holders who participated voted yea with 97.5% of the vote. The proposal barely cleared a 1% quorum in the affirmative with 1.13% share.
A single yea voter made all the difference: their account was the only reason the proposal cleared the 1% mark.

(Jun 20, 2022 11:04 AM)Nano Shield Wrote:  wait what, they can just freeze any wallet they want? what kind of crypto joke is this and how they have the nerve to call themselves decentralized ?

(Jun 20, 2022 02:57 PM)Itachi Uchiha Wrote:  Lol? Almost every major crypto can. USDT, USDC are heavily known to do it for “police investigations”.

The police can at any time request your funds be frozen in stables.

(Jun 20, 2022 11:56 PM)Nano Shield Wrote:  in stablecoins but not normal cryptos

(Jun 20, 2022 10:40 AM)BV1 Wrote:  Unfortunately Solend hit pause on this and came out with another proposal.

I was very much looking forward to Solana's next uber-centralized action.

(Jun 21, 2022 01:57 AM)th3c0rrupt3d0n3 Wrote:  Truth is, the only truly decentralized and sustainable network is Bitcoin.