[Cameron]

Solend users voted to "grant emergency power to Solend Labs to temporarily take over the whale's account."

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.

Source: https://www.coindesk.com/tech/2022/06/19...ion-chaos/



Absolutely mind blowing they can do this. Has anyone else been watching this unravel? Decentralization at it's finest.

[shreder]

I mean the Solana went offline for data center maintenance multiple times. Is this really that surprising?

Whale tries to abuse the fact that Solana runs on like 1 server on AWS, so people abuse mutable scam smart contracts CeFi to take control of their funds.

[SUI-3183372]

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.

[Frost Crypt]

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 ?

[Omniscient]

What a network. I guess in the world of crypto it takes all kinds. Solana is going to be a lesson one day of what NOT TO DO.

[VGO]

What a Scam...
This is really bad even for Crypto Reputation.

[Maskin]

This is indeed bad if you're holding Solana but for crypto as a whole, I think this is good because this is how crypto will progress. There is a problem and this is one way to "fix" it. There will be errors along the way, and while some cryptocurrencies make questionable decisions and will likely end up like MySpace or Vine, it's somewhat necessary for the space.

[Rahul007rhp]

All types of shit going on with solana , worries me abit

[Itachi Uchiha]

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 ?

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.

[Frost Crypt]

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.

in stablecoins but not normal cryptos

[Itachi Uchiha]

in stablecoins but not normal cryptos

Not true at all, ADA, ETH and many other “normal” crypto could absolutely do it. It’s part of a “standard” contract. The fact that they don’t/haven’t doesn’t mean they cannot.

[th3c0rrupt3d0n3]

Truth is, the only truly decentralized and sustainable network is Bitcoin. Solana is a joke by itself, this protocol is just one more to the list of traditional finance with a 'decentralized' costume.

[MavenGradle]

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.

Indeed. Solend is the cause but Solana is still a joke blockchain.

[Omniscient]

SOL is Proof of Stake, correct?

Isn't this a Red Flag for the crypto world? I love the crypto ecosystem with the many possibilities but ultimately it's Bitcoin and Proof of Work that's a win, has been winning, and will continue to win. I like proof of stake in theory but it continues to fail where Bitcoin succeeds.

I think Bitcoin Maximalists are zealot fascists but that doesn't make them wrong about the power of Bitcoin and PoW.

[Lilith]

Truth is, the only truly decentralized and sustainable network is Bitcoin.

Well that's just not true. LTC and XMR are both truly decentralized and sustainable as well.