Solana is in a dire state right now. The network has halted several times, and the price has also crashed. Any more pressure on its price could put investors through further pain and losses. However, something is coming as a large liquidation might happen on Solana’s Solend protocol. A whale has recently deposited 5.7 M SOL worth around $170M and borrowed $108M USDT and USDC. Since a liquidation might happen, Solend on the Solana network proposes to steal the user’s fund and prevent it.
Solend on the Solana network proposes to steal the user’s fund
The whale that has deposited 5.7 million Solana on the platform hasn’t closed their position. This could soon result in an on-chain liquidation which will put huge pressure on the network. Solana’s Solend team says liquidators could stay active and spam the network, and the network could go down again. It is also very risky as the liquidity on DEX is not very deep and could have a huge effect on the price. Other liquidators could follow this one liquidation to take the prices lower, and their lenders will be facing losses.
The worst possible solution
Solend has been requesting that they are given emergency power to take over the whale’s account. They want to do the liquidation OTC (over-the-counter) to prevent more pressure on Solana’s network. It means the trade will be done privately, and there won’t be a public order book. Once the whale’s account reaches a safe level, the power would be revoked.
If this is allowed, it will mark the end of Solana
I am pretty optimistic that this is not what decentralization looks like. Solana has never been truly decentralized, yet its website and team claim it does. If the Solend team is given access to this whale’s account, it will show that the protocol is very centralized. It is likely to happen soon, and the voting has also happened. Users are also not happy about the request on Reddit. Even though most understand the platform’s POV on this, it is still not the right thing to do.
Do you think confiscating the whale’s fund for whatever reason is the right thing? And are you invested in Solana? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
Also Read: Jim Cramer expects Bitcoin to reach $12,000 in the crash.
