Hey! Hope you guys are doing well today,
This is gonna be one of those news type of Idea's but it's important nonetheless so let's dive in.
⚡️One of Solana's lenders Solend did a community vote and approved a whale wallet take over in order to avoid potentially facing a DEFI implosion. Over the weekend on Sunday Solend which is a popular DeFi protocol on Solana came up with and seemingly put together a governance proposal addressing one of the whale wallets at risk of liquidation.
⚡️The proposal was called "SLND1 : Mitigate Risk From Whale". The proposal was launched on Sunday seemingly out of nowhere without any announcement with the vote closing on a 97% approval rating. All of this is coming out amongst last weeks layoffs between crypto companies Coinbase, BlockFi, the liquidations that hit Three Arrows Capital and Celsius as DeFi took a $25 billion hit last week alone in sell off-pressure. It doesn't help either that 8 Blocks Capital which is a trading form called out to other platforms to freeze any assets owned by Three Arrows Capital as insolvency rumors are starting to fly around as crypto took a heavy hit last week. Basically the vote was super sketchy and kills the whole idea being that crypto isn't decentralized as most have thought in a DAO blockchain system.
⚡️The main reason the vote was put up was that the large whale wallet was facing liquidation on a scale which would put a large strain on Solend as well as the users and according to the proposal's notes it commented that if SOL we're to drop to $22.30 then the wallet position would be liquidated for 20% of the borrowed $21 Million. The proposals aim was basically to take over the whale's account and conduct a liquidation through an over the counter transaction in order to avoid the potential pain that a liquidation of the wallet could inflict on Solana and Solend.
⚡️The move of course was hit harshly after on Twitter being as this damages the whole idea of DeFi not to mention crypto being as it again kills off that decentralized aspect and brings up principles not to mention shows that Solend's ability to keep/control it's debt may not be so great if it is trying to avoid dealing with a position liquidation of a couple million alone.
⚡️The main issue being that if the whale's position is liquidated it would potentially put SOL so low that a cascading set of liquidations could follow like a bunch of dominos and that could ripple across the DEX books not to mention DeFi as well of course. This definitely doesn't help the sector as this crypto fall has revealed many many cracks in the crypto ecosystem that are coming about thanks to rushed, in the moment decisions with more moves only bringing more accusations and putting more of a bad name on crypto in general.
⚡️The move was promptly reversed following the twitter uproar that followed as a second governance vote was put up and invalidated the takeover plan. Solend reiterated that if SOL drops in price and the whale were to get liquidated then Solend would likely end up with bad debt which would in place put heavy strain on the Solana network with some even fearing that if the whales position gets liquidated it could cause SOL to hit 0 creating another LUNA type of event. The second proposal was hit with 1,480,264 votes in favor of disregarding the first original SLND1 proposal invalidating it and pushes Solend to find another solution to deal with the potential issue without forcibly taking over an account with the new proposal also increasing the governance voting time to one day. That last part will definitely help prevent "shady" proposals from being passed seemingly out of nowhere much like SLND1 was on Sunday.
⚡️The situation has created a dilemme being that solend could save Solana from a DeFi implosion if it were to take over the wallet and liquidate it using those emergency powers but would show that anyone's assets aren't truly safe on Solana, let alone whale accounts and if they we're to move forward with that original proposal and were to liquidate the position then a boycott could start of even worse, a sell-off could start as users start to sell their positions fearing the fact that their positions aren't truly "their positions" This doesn't even include whales which honestly if they wanted to jump out of Solana thanks to the wallet risk of which could cause an even larger impact in a domino effect than if the lending platform was to actually move ahead with the OTC transaction. I mean think about it, if you've got a lot of money and you see this, are you gonna wanna keep your money somewhere where it can be frozen and literally liquidated just because of something that's not your faut? No, your gonna pull that money out. And those whale positions are huge, especially when put together the potential backfall from whales leaving and exiting could be real harsh in the least to say.
⚡️I'm gonna leave things there since the proposal was invalidated but this is one of those moments in crypto that's helping to set up our Principles and shows us that the community indeed does have a 'conscience' being as it could have easily let the proposal pass and potentially avoid losing money or letting SOL fall further but instead they voted to invalidate it being as it was morally and in principle of crypto/blockchain principles wrong to take over an account and simply liquidated because of an issue out of the wallet holders control. It's like having a car and your car dealer comes over to you, says they are gonna take it, then takes off a chunk of it and gives it back to you with 20% of the car gone simply because they can't afford the finance for their company or whatever it may be. It doesn't make sense and is against all principles, especially those of crypto.
Thank you guys for tuning in and if you'd like to leave a like and follow it would be much appreciated but wishing you guys the best and keep well as always!
~ Rock
This is gonna be one of those news type of Idea's but it's important nonetheless so let's dive in.
⚡️One of Solana's lenders Solend did a community vote and approved a whale wallet take over in order to avoid potentially facing a DEFI implosion. Over the weekend on Sunday Solend which is a popular DeFi protocol on Solana came up with and seemingly put together a governance proposal addressing one of the whale wallets at risk of liquidation.
⚡️The proposal was called "SLND1 : Mitigate Risk From Whale". The proposal was launched on Sunday seemingly out of nowhere without any announcement with the vote closing on a 97% approval rating. All of this is coming out amongst last weeks layoffs between crypto companies Coinbase, BlockFi, the liquidations that hit Three Arrows Capital and Celsius as DeFi took a $25 billion hit last week alone in sell off-pressure. It doesn't help either that 8 Blocks Capital which is a trading form called out to other platforms to freeze any assets owned by Three Arrows Capital as insolvency rumors are starting to fly around as crypto took a heavy hit last week. Basically the vote was super sketchy and kills the whole idea being that crypto isn't decentralized as most have thought in a DAO blockchain system.
⚡️The main reason the vote was put up was that the large whale wallet was facing liquidation on a scale which would put a large strain on Solend as well as the users and according to the proposal's notes it commented that if SOL we're to drop to $22.30 then the wallet position would be liquidated for 20% of the borrowed $21 Million. The proposals aim was basically to take over the whale's account and conduct a liquidation through an over the counter transaction in order to avoid the potential pain that a liquidation of the wallet could inflict on Solana and Solend.
⚡️The move of course was hit harshly after on Twitter being as this damages the whole idea of DeFi not to mention crypto being as it again kills off that decentralized aspect and brings up principles not to mention shows that Solend's ability to keep/control it's debt may not be so great if it is trying to avoid dealing with a position liquidation of a couple million alone.
⚡️The main issue being that if the whale's position is liquidated it would potentially put SOL so low that a cascading set of liquidations could follow like a bunch of dominos and that could ripple across the DEX books not to mention DeFi as well of course. This definitely doesn't help the sector as this crypto fall has revealed many many cracks in the crypto ecosystem that are coming about thanks to rushed, in the moment decisions with more moves only bringing more accusations and putting more of a bad name on crypto in general.
⚡️The move was promptly reversed following the twitter uproar that followed as a second governance vote was put up and invalidated the takeover plan. Solend reiterated that if SOL drops in price and the whale were to get liquidated then Solend would likely end up with bad debt which would in place put heavy strain on the Solana network with some even fearing that if the whales position gets liquidated it could cause SOL to hit 0 creating another LUNA type of event. The second proposal was hit with 1,480,264 votes in favor of disregarding the first original SLND1 proposal invalidating it and pushes Solend to find another solution to deal with the potential issue without forcibly taking over an account with the new proposal also increasing the governance voting time to one day. That last part will definitely help prevent "shady" proposals from being passed seemingly out of nowhere much like SLND1 was on Sunday.
⚡️The situation has created a dilemme being that solend could save Solana from a DeFi implosion if it were to take over the wallet and liquidate it using those emergency powers but would show that anyone's assets aren't truly safe on Solana, let alone whale accounts and if they we're to move forward with that original proposal and were to liquidate the position then a boycott could start of even worse, a sell-off could start as users start to sell their positions fearing the fact that their positions aren't truly "their positions" This doesn't even include whales which honestly if they wanted to jump out of Solana thanks to the wallet risk of which could cause an even larger impact in a domino effect than if the lending platform was to actually move ahead with the OTC transaction. I mean think about it, if you've got a lot of money and you see this, are you gonna wanna keep your money somewhere where it can be frozen and literally liquidated just because of something that's not your faut? No, your gonna pull that money out. And those whale positions are huge, especially when put together the potential backfall from whales leaving and exiting could be real harsh in the least to say.
⚡️I'm gonna leave things there since the proposal was invalidated but this is one of those moments in crypto that's helping to set up our Principles and shows us that the community indeed does have a 'conscience' being as it could have easily let the proposal pass and potentially avoid losing money or letting SOL fall further but instead they voted to invalidate it being as it was morally and in principle of crypto/blockchain principles wrong to take over an account and simply liquidated because of an issue out of the wallet holders control. It's like having a car and your car dealer comes over to you, says they are gonna take it, then takes off a chunk of it and gives it back to you with 20% of the car gone simply because they can't afford the finance for their company or whatever it may be. It doesn't make sense and is against all principles, especially those of crypto.
Thank you guys for tuning in and if you'd like to leave a like and follow it would be much appreciated but wishing you guys the best and keep well as always!
~ Rock
