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Solana blockchain network’s lending protocol got the problem that could pose a threat of liquidation.
Finally the efforts of Solend were fruitful, which made the Solana (SOL) whale take the required actions. The recent governance vote at Solend’s lending platform on Solana (SOL) whale who was subjected for the potential takeover, he responded and got in touch with the firm. As it came to take suitable action, this Solana whale moved USDC stablecoin of USD worth about $25 million debt to the decentralized exchange platform of Solana network, Mango Markets.
Solend shared this insight on Twitter where it stated that the whale has taken some action on the suggestion of Solend team for moving its position to different lending protocols. As it was being anticipated that this act would reduce USDC’s utilization within Solend while allowing users of crypto lending platform to withdraw their assets again.
However, considering the bigger size of this liquidation problem, this move of Solna (SOL) whale moving such an amount of USDC seems to run the job action. The Solend team also highlighted that currently they are constantly working with the Mango team and the whale to find out a more reliable and long term solution for this underlying problem.
Additionally, there is another governance vote that Solend community has passed that will act on lowering the account borrowing limit significantly from the current limit of $120 million to $50 million. It was also cleared that any debt above this newly set limit will be obliged to liquidate regardless of collateral value.
Further, Solana’s lending protocol also minimized the amount of liquidation within one transaction as it has lowered the close factor of maximum liquidation to 1%. Along with this, it has also lowered the penalty for liquidation on Solana from earlier 5% to now 2%. It’s also been said that both these reductions are temporary and they may change after the whale situation gets dealt with properly.
The Solend lending platform of Solana network has received heavy criticism for its governance vote dubbed as SLND1 that was serving its aim to take over the Solana (SOL) wallet posing the risks of liquidation. The vote has received about 97% votes in support of the proposal and got approved.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
