Solend backtracks on ’emergency power’ proposal following community backlash
Solana-based decentralized finance protocol Solend has turned back its original proposal to take over the whale wallet by allowing users to vote on whether to continue or find another solution.
The decision was made after the crypto community widely criticized the first proposal. It would have raised the question about its “decentralization”.
Meanwhile, a new proposal SLND2 Have Three meanings: Invalidate the first proposal, extend the voting period to a full day, and start a new, less intrusive way to resolve the whale wallet crisis in the protocol.
According to the developers, the recent price recovery of SOL has given us more feedback and time to look for new alternatives.
However, the voting period is one day because they believe they need to act quickly and deal with system risks. The risk here is that if the price of SOL drops to $ 22.30, 20% of the whale’s wallet could be liquidated.
The liquidation resulted in a bad debt of about $ 20 million, and developers are worried that this could create excessive selling pressure on Solana. And such events can even lead to network failures.
Cryptographic community washes Solend
The developers of Solend believe they are acting in the best interests of the protocol, but members of the crypto community are questioning the claims of decentralization.
Congratulations, Sorend Gentleman, you have reinvented TradeFi, but with more steps and more frequent and unpredictable interruptions.
—Emin Gün Sirer 🔺 (@ el33th4xor) June 19, 2022
According to AvaLabs founder Emin Gun Sirer, Solend developers are basically on the traditional financial and centralized path by not allowing contracts to be fulfilled.
Absolute comedy. @solendprotocolThe “decentralized” lending protocol, which appears to be based on Solana, has “voted” to take over a whale account with emergency authority to eliminate the possibility of forced liquidation.
Only the name is “distributed”. pic.twitter.com/Vrua3dFoES
— DylanLeClair 🠠 (@DylanLeClair_) June 19, 2022
Another crypto community member, Dylan Le Clair, declared Solend to be “distributed” by name only and their actions to be “absolute comedy.”
My heart is blown away by this
This is not only against the spirit of “DeFi” in every way, but also illegal.
At * best *, this is a trespass / conversion
… It can get worse in some situations… https://t.co/FK3lyb495X
— _GabrielShapir0 (@lex_node) June 19, 2022
Gabriel Shapiro, legal adviser to Delphi Digital, said the proceedings were illegal and contrary to the spirit promoted by DeFi.
Adding context, if you don’t run this OTC, the Solend team will pay back $ 20 million in bad debt, putting your deposit at risk if your position becomes invalid.
However, broken precedents and trust from teams that are supposed to manage someone else’s money without consent are a big issue.
— FatMan (@FatManTerra) June 19, 2022
FatMan Terra also said the action would set a bad precedent and lose confidence in the team.
But in that defense, the Solend team said it tried Contact the owner of the whale wallet and request that the clearing threshold be lowered to $ 18.50.
