In the possible takeover by a recent Solend governance poll, the Solana (SOL) whale contacted the lending protocol and transferred $25 million worth of USD Coin (USDC) debt to Mango Markets.
In a post, Solend revealed that the whale has followed the team’s recommendation to transfer across numerous loan protocols. The legislation reinstates the ability of USDC users to withdraw funds from Solend.
The Solend team mentioned that while the move appears to be a band-aid fix for a larger liquidation issue, they are working with the whale and Mango teams to develop a more long-term solution to the underlying problem.
Apart from that, the lending protocol has also passed another governance vote, lowering the account borrow limit to $50 million. Despite what the collateral value is, if you have more debt than your new limit sets, it will be sold.
Furthermore, the protocol has optimized the process by limiting the maximum liquidation close factor in one transaction to 1%. It reduced the Solana liquidation penalty from 5% to 2%, as well as lowered the liquidation penalty for one Solana contract from 10% to 7.5%. The reductions are temporary and may change once the whale situation is resolved.
On Sunday, the Solend lending platform received flak for its SLND1 governance vote to take control of the whale’s wallet and reduce risks. With a 97% approval rating, the ballot closed. However, the decision was met with a lot of criticism since it contradicts the ideals of decentralization.
The lending platform decided to invalidate the first governance resolution, SLND1, due to the strong negative feedback it received as a result of the initial transfer. The second option, which received 1,480,264 votes in favor of disregarding the wallet takeover plan, was accepted.