For the past three years, decentralized finance (DeFi) has been dreaming of an economy that did not need an institution or a trusted third party to regulate itself. However, like all old bets on deregulation, this dream assumes a growing market. Otherwise, disaster will happen very quickly. An example of a whale about to be liquidated on Solend and endangered by it the course of the solana shows it again. By suggesting the position of the whale, caused the protocol scandal. Is this the end of decentralization? Isn’t this step aside likely to further damage Solana’s reputation (SOL)?
- Dangerous game of whale on the Solana (SOL) network.
- A double-edged rescue
- Can the price of solana still fall?
Dangerous game of whale on the Solend protocol
We often think that the whales indelible and will never make mistakes. In fact, you need to be aware that some of them are wrong about the market situation and often compete with each other. Liquidation a whale it often serves to enrich others. The IS whale which we are about to talk about, he started getting people to talk about it by posting 5.7 million solanas as collateral on Solend. It was $ 215 million at the time of filing. This collateral has enabled him to borrow $ 108 million stable tires. With collateral twice as high as his loan, one might think this is it whale He was cautious, even though he had just borrowed 95% of the protocol’s deposits.
However, market failure and the course of the solar (SOL) course almost did not create a catastrophe. This liquidation threshold whale corresponds to SOL at 22.3 dollars. However, on June 14, the solana reached 26.4 dollars and this came from this moment whale it started creating problems. In fact, its collateral would be sold if liquidated. With an additional 5.7 million solanas on the market, the price of solana would continue to fall. The fate of the course of the solana therefore depends on the fate of the whale. In fact, too rapid a fall in the price of the soles could lead to cascading liquidations. It would also be disastrous for the protocol and for Solana.
Rescue a two-edged sword for your Solana blockchain
Because of this situation, the Solend protocol proposes an unusual solution: getting into debt whale. The protocol would liquidate the whale by hand by dealing with it. Once that agreement has been reached, the protocol would have repurchased the debts without selling the solids. But this solution caused scandal and the protocol had to withdraw quickly. While its principle may seem commendable (avoid further liquidation and protect the ecosystem), in reality, it goes against another even more important principle: decentralization. Fans of decentralized finance choose this market because it self – regulates without external intervention. Everyone is aware of the rules of the game and all interventions change them arbitrarily. If we save a whalewhy not another?
The course is can solana cryptocurrency crash again?
The scandal over the Solend proposal comes at a very turbulent time for the price of soles. The $ 258 ATH is far out. Even if, of course, its course depends on that of bitcoin and the downturn in the market, the continued shutdown of its network has damaged its reputation. Its 2021 summer bull rally is completely gone and only those who bought solana before the first rise in spring 2021 are still the winners. In addition, since the launch of the network, its detractors have criticized its excessive centralization. This new episode reinforces their standing and will undoubtedly allow them to rise their steps.
Solana’s uncertain future is linked to Solend
Whatever the future whales, it is therefore necessary to predict further potential reductions as a result of this rescue effort. Solana has certainly been unlucky for the past few months and hers success story no longer relevant. With the arrival of many blockchains from last fall, the solana is not sure to get its ATH one day. However, the network still has strong support from its community and large investors. It is hoped that this will suffice for this crossing of the desert that awaits this old Ethereum killer.
Should we help the community even if it does not want to? This is a difficult choice for Solend because of the risk of liquefaction whale. If this proposal is abandoned, it will remain a landmark, as it violates the principle of decentralization. Even if a whale It gets liquidated, leading to the collapse of the sun, decentralized finance has its rules. Accepting them from the inside was not enough, it would be handed over to the regulators who are waiting for that. Solend is therefore criticized for dealing with their sensuality whales although this lesson will certainly lead to beneficial changes in the implementation of. protocol loan.
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