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Tuesday, January 31, 2023

Solend invalidates Solana whale wallet takeover plan with second governance vote

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Solana-based decentralized finance (DeFi) lending protocol Solend has created one other governance vote to invalidate the recently-approved proposal that offers Solend Labs “emergency powers” to entry a whale’s wallet to keep away from liquidation. 

On Sunday, the crypto lending platform launched a governance vote titled “SLND1 : Mitigate Risk From Whale.” This permits Solend to scale back the danger that the whale’s liquidation poses to the market by letting the lending platform entry the whale’s wallet and letting the liquidations occur over-the-counter (OTC).

According to Solend, if Solana (SOL) drops in value and the whale will get liquidated, the lending platform might “end up with bad debt” and pressure the Solana community. The proposal was accredited, triggering criticism from members of the community.

As the group condemned the transfer, calling it the alternative of what DeFi ought to be and outright unlawful, the Solend staff initiated a second governance proposal vote to invalidate the previously-approved proposal. The proposal ended with 1,480,264 votes in favor of disregarding the SLND1 proposal.

The new proposal invalidates the earlier vote and can push Solend to seek out one other resolution that doesn’t contain forcibly taking on an account. Additionally, it additionally will increase the governance voting time to 1 day.

Related: SOL price trending toward yearly low as Solana TVL drops $870M in three days

The state of affairs has put the crypto lending platform right into a ugly dilemma. If Solend succeeds at taking on the whale’s wallet and being granted emergency powers, it might save SOL from a DeFi implosion. However, this can present that anybody’s property could be confiscated throughout the platform and might trigger a boycott. Cryptokk.eth tweeted:

On the opposite hand, if the Solend staff will not be capable of mitigate the dangers surrounding the whale’s account, some believe that it could actually set off a Solana meltdown, inflicting SOL’s value to dump closely.