Solana-based decentralized finance (DeFi) lending protocol Solend has produced another governance election to invalidate the lately-approved proposal that provides Solend Labs “emergency powers” to gain access to a whale’s wallet to prevent liquidation.
On Sunday, the crypto lending platform launched a governance election entitled “SLND1 : Mitigate Risk From Whale.” This enables Solend to lessen the danger the whale’s liquidation poses towards the market allowing the lending platform connect to the whale’s wallet and letting the liquidations happen over-the-counter (OTC).
According to Solend, if Solana (SOL) drops in cost and also the whale will get liquidated, the lending platform may “end track of bad debt” and strain the Solana network. The proposal was approved, triggering critique from people from the community.
Because the community condemned the move, calling it the alternative of the items DeFi ought to be and outright illegal, the Solend team initiated another governance proposal election to invalidate the formerly-approved proposal. The proposal ended with 1,480,264 votes in support of disregarding the SLND1 proposal.
The brand new proposal invalidates the prior election and can push Solend to locate another solution that doesn’t involve intentionally overtaking a free account. Furthermore, additionally, it boosts the governance voting time for you to eventually.
The problem has place the crypto lending platform right into a nasty dilemma. If Solend succeeds at overtaking the whale’s wallet and being granted emergency forces, it might save SOL from the DeFi implosion. However, this can reveal that anyone’s assets could be confiscated inside the platform and may result in a boycott. Cryptokk.eth tweeted:
Regardless of what they does, there’s not a way to alter the truth that assets deposited in to the platform could be confiscated through the team anytime. Avoid the woking platform is the greatest way to avoid it. Anytime they can tweet a comment to forfeit your assets.
— cryptokk.eth (L,3) (@Black_K168) June 20, 2022
However, when the Solend team can’t mitigate the potential risks all around the whale’s account, some believe that it may trigger a Solana meltdown, causing SOL’s cost to dump heavily.