Solend, the lending service platform on Solana -Users voted to control the largest whale account to minimize the risk of liquidation.
This is due to the fact that the whale account and its extremely large margin positions pose a threat to on-chain liquidations. Large whale holdings are said to plunge the Solend protocol and users into a risk bubble. The governance vote will grant Solend Labs ’emergency powers’ to liquidate vulnerable whale assets.
Over $20 million in Solana will be liquidated through OTC transactions
Approximately $20 million in SOL will be liquidated through the OTC. To prevent on-chain liquidations that could cause chaos in Solana’s DeFi market.
This whale is said to be a big one as it deposited 5.7 million SOL and also borrowed over 108 million USDC. This whale holds more than 95% of the main margin and 88% of the USDC margin. SOL is currently trading at $33.50 and if the price hits $22.30, the whale will be able to liquidate up to 20% of its loans.
This could create chaos in the market and cause bad debt and affect the Solana network.
The team states in the proposal that the decision was made after the whale was not contacted through Twitter and on-chain messages. The whale did not react, which prompted the team to continue with the decision. The resolution was passed with 97.5% of voters in favor.