- Users of a decentralized borrowing and lending protocol, Solend voted in large numbers for the implementation of a proposal that aims to mitigate the risk from a particular whale that has a big margin position on the platform.
- The proposal mentions that in case the value of SOL fell to $22.30, the account of the whale would become liquidatable for around 20% of borrowings.
- Moreover, the proposal mentioned that once the whale’s account reaches a safe level, the emergency powers granted by a “yes” vote would be revoked.
A proposal that aims to reduce the risk from a particular user with a big margin position on Solend, a decentralized protocol for lending and borrowing on Solana, received large votes in favor of it by the platform’s users Today.
According to the proposal that aims to “mitigate risk from a user”, the whale with risks associated with them haven’t been heard of for 12 days and had 95% of SOL deposits in the main pool of the protocol.
The proposal also mentions the potential scenario, if the value of SOL goes down to $22.30, the account of the whale would turn liquidatable for around 20% of borrowings. The market wouldn’t be able to handle it if this happens and potentially will leave Solend in bad debt. Eventually, it will create a mess while the Solana network will be forever strained.
Individuals who authored this proposal said that they were unsuccessful in their attempts to mitigate the risk, therefore it became clear that action needs to be taken, and arrived at the decision to conduct voting.
A“yes” indicates that the special margin requirements need to be created for large whales that make up for more than 20% of borrows and give emergency power to Solend Labs for the temporary takeover of the whale’s account for facilitating the execution of the OTC through liquidation, while a “no” vote means no action taken.
Further, the proposal stated that after the whale’s account reaches a safe level, the emergency powers granted by a “yes” vote would be revoked.
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Source: https://www.thecoinrepublic.com/2022/06/20/proposal-aimed-at-mitigating-risk-imposed-by-whale-receives-huge-votes-in-its-favor/