The Solana credit protocol is faced with a governance problem

The Solana credit protocol is faced with a governance problem

user of the lending and loan protocol based on Solana granted the steward of the platform to reduce the liquidation risks of Solend's largest Bagholder.

These powers are first awarded via the decentralized autonomous organization (DAO) based in solend. href = "https://realms.today/dao/7sf3tcwm58vhtkjmwuw2p3t6ubx7ue5vkxpmnxjuz1hn/propo Sal/hual6cdunstfnjgvwmnyizdhvcolaudtvfgjd8kychj4 "> Governance proposal allow Solend Labs to take over the whale account in order to carry out an out -of -the -counter trade, the price of Solanas Native token should fall below $ 22.30.

but according to the public outcry a rel = "nofollow noopener" target = "_ blank" href = "https://realms.today/dao/7sf3tcwm58vhtkjmwuw2p3t6ubx7ue5vkxpmnxjuz1hn/proposal/3gee5p3d7vfzcigsxgiao1hsnprm6jwna5a" Signalization proposal tried to go back.

The first proposal gave the developers the green light for the implementation of special margin requirements for large whales, which lend more than 20 % from the primary pool of the protocol, whereby a liquidation threshold of 35 % is now understood.

More than 1.15 million votes were cast for the authorization of the special powers or around 97.5 %, compared to 30.101 (2.5 %). A single account that represents 1 % of all participating users, but has given more than 1 million votes for the Realms based on Solana

The Wal Account and its users, since the account holds "an extremely large margin position" shortly before the liquidation, Solend said in a Post Sunday.

After repeated attempts to contact the whale, Solend said that he was put to voting in order to take preventive measures regarding the account. The step raises questions about the principles and the spirit of decentralized financing, which aims to eliminate middlemen and strengthen financial self -configuration.

USDC and USDs worth around $ 108 million are borrowed from the whale, Sol worth $ 170 million, which are stored as security in the main pool of the protocol. This corresponds to about 88 % of USDC loans and 95 % of SOL deposits for the credit platform.

If the price of Sol falls below $ 22.30, the whale account could be liquidated for up to 20 % of its loans, which is estimated at $ 21 million, Solend said. Sol was last seen for around $ 32.60 after it bounced off a 24-hour low of $ 29. Blockworks-forschung Show data.

"It would be difficult for the market to absorb such an impact, since liquidators generally sell on Dexs," said Solend in his contribution. "In the worst case, such could end with a failure failure. This could cause chaos and put a strain on the Solana network."

After concerns about the potential risk, users have started to lift assets in mass, which had to increase the USDC and USDT use in the primary pool of the protocol to 100 %, confirmed Solend in his contribution. The result does not allow the remaining inserts to withdraw. What is even worse, all positions that are secured by insoles from the two stable coins cannot be liquidated.

"It is extremely risky to let a liquidation of this size pass on-chain. The Dex liquidity is not high enough to cope with a sale of this size and could cause cascade effects," said Solend.

The governance step has annoyed Defi supporters who see it as a tacit admission that not only designs have failed for such design decisions, but also the protocol supported by Solana Ventures is centralized-just a dao.

It is unclear what the next steps after the second vague formulated proposal are the critic of the first. The proposal that was accepted by a similarly overwhelming majority of the SLND-the governance token of the protocol-allegedly "invalid" the first and extends the duration of the governance votes from funny six hours to a whole day.

The team also promises to "work on a new proposal that does not include any emergency powers to take over an account."

The puzzle represents another problem for the emerging Solana ecosystem, whose network has experienced several failures this year, which shakes trust in stability and resilience in order to maintain a constant operating time in view of intensive market activities.

Solana has a story of downtimes caused by on-chain liquidations, although this case has a 100-time impact on the network and ecosystem. href = "https://twitter.com/solendprotocol/status/15385365715881280?s=20&t=GL7A9Q79NLZ9KBM8WBYAA"> tweeted on Sunday.

"It is extremely risky for everyone involved."

The fear of infection of the market continues to plague the trust and determination of the cryptom market, which is still shaken by the aftermath of Luna's implosion in May and the hiring of withdrawals and transfers by the lender Celsius a week ago

. .

The article Solana Lending Protocol Faces Governance Conundrum is not a financial advice.