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Solend Invalidates Solana Whale Portfolio Takeover Plan Through Second Governance Vote

Solend Invalidates Solana Whale Portfolio Takeover Plan Through Second Governance Vote

Solana-based decentralized financial lending (DeFi) protocol has initiated another governance vote to invalidate the recently approved proposal that gives Solend Labs ’emergency powers’ access to whale wallets to avoid liquidation.

On Sunday, the cryptocurrency lending platform launched a governance vote entitled “SLND1: Whale Risk Mitigation.” This allows Solend to reduce the risk of whale liquidation to the market by allowing the lending platform to access the whale wallet and allowing for over-the-counter (OTC) liquidations.

According to Solend, if the price of Solana (SOL) falls and whales are liquidated, the lending platform could be in “bad debt” and put pressure on the Solana network. The proposal was approved, prompting criticism from members of the public.

While the public condemnation calling this initiative contrary to what DeFi should be and completely illegal, the Solend team initiated a second governance proposal vote to invalidate the previously approved proposal. The vote resulted in 1,480,264 votes in favor of invalidating the SLND1 proposal.

The new proposal invalidates the previous vote and will put pressure on Solend to find an alternative to mandatory takeovers of accounts. In addition, it extends the governance voting deadline to one day.

Read also: Annual Low SOL Price Trends As TVL Solana Loses $ 870M in Three Days

The situation has put the cryptocurrency lending platform in a tough dilemma. If Solend manages to take control of the whale wallet and gain emergency powers, he could save SOL from the DeFi explosion. However, it will show that anyone’s assets can be confiscated within the platform and can trigger a boycott. Cryptokk.eth tweeted:

No matter what the team does, there is no way to change the fact that the team can confiscate assets deposited on the platform at any time. Escape from the platform is the best way out. At any time, staff may tweet an ad to confiscate your assets.
– cryptokk.eth (L, 3) (@ Black_K168) June 20, 2022

On the other hand, if Solend’s team is unable to mitigate the risks of whale counting, some think that it could trigger a fall towards Solana, leading to a strong dumping on the price of SOL.

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