Solend users, which is the borrowing as well as lending service from Solana, made a vote on Sunday. They decided to force the takeover of the largest account of the protocol. This is a whale account that had a large position related to the margin. Some Solend contributors felt that this account was very close to a liquidation cliff that could set off a chain reaction.
This governance vote was unprecedented. It was also the first vote from Solend. The vote provides Solend Labs with powers that could be used in emergency situations. They could, during emergencies, liquidate the vulnerable assets of the whale. This would amount to around $20 million. This could be done using over the counter trades over DeFi exchanges. This would happen in case the price of SOL becomes too low.
Solend Labs And The Vote
According to Solend Labs, there was on-chain liquidation related to the position of the whale. This would create Chaos when it comes to the DeFi markets of Solana. This is why doing a service that is over the counter, might help to prevent such an outcome. However, at the same time, this also ends up usurping the smart contract protocol that Solend is meant to follow. Solend programmatically follows certain protocol wherever the liquidation of any other borrower is concerned.
Those who were for the intervention Saif that the whale for not a typical user. Should the price of liquidation hit around $22.30 SOL, they could be liable for around $20 million. At the present moment, SOL is trading at around $32.27.