Solend is not taking over whale’s account after backlash

By Raffaele Redi
• Updated

Stay up to date with the latest Solana (SOL) news as it happens

A stack of black Solana coins bearing the SOL name and logo                                 
The Solana protocol was launched in 2020 by the Geneva-based Solana Foundation – Photo: Shutterstock
                                

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Solana-based borrowing and lending service, Solend, has invalidated its initial proposal aimed at granting developers emergency powers to take control of the protocol’s largest account after it prompted a backlash among crypto players.

The move, to prevent any potential chaos if the SOL5.7m ($170m) account was liquidated, received criticism including from Binance CEO, Changpeng Zhao, while sparking a controversial debate on the possibility of a decentralised autonomous organisation taking control of private accounts.

If SOL dropped to $22.30, the whale’s account would have become liquidatable for up to 20% of borrows, around $21m.

“We’ve been listening to your criticisms about SLND1 and how it was conducted. The price of SOL has been steadily increasing, buying us some time to gather more feedback and consider alternatives,” said the Solend Team.

The network said it would also increase governance voting time to one day, while developers said to be working “on a new proposal that does not involve emergency powers to take over an account”.

“We recognise that a voting time of one day is still short, but we need to act swiftly to address the systemic risk and fact that normal users can’t withdraw USDC. We’re committed to protecting user funds, transparency, and doing what’s right,” Solend Team added.

According to CoinMarketCap, Solana (SOL) is changing hands at $34.36 up by 13.4% over the past 24 hours.

Prices are correct as of 10:45 BST (UTC +1).

20 June 2022: Solana DeFi platform votes to control whale account

Users of the Solana-based lending platform Solend have approved a vote to grant developers emergency powers and take control of the protocol’s largest account to avoid any financial chaos if the account becomes liquidated. 

In a Medium.com post, the Solend Team said the whale account “has an extremely large margin position that is putting Solend protocol and its users at risk”. The whale account mainly consists of a 5.7 million SOL deposit ($170m) with a borrowing of 108 million USDC and USDT, and a liquidation price of $22.30.

“If SOL drops to $22.30, the whale’s account becomes liquidatable for up to 20% of their borrows, around $21m. It’d be difficult for the market to absorb such an impact since liquidators generally market sell on DEXes. In the worst case, Solend could end up with bad debt. This could cause chaos, putting a strain on the Solana network,” said the post.

The network voted in favour of enacting special margin requirements for large whales who represent more than 20% of borrows while granting emergency power to Solend Labs to “temporarily take over the whale’s account so the liquidation can be executed OTC and avoid pushing Solana to its limits”.

The vote was decided by one whale who granted the 1% threshold to be fulfilled, sparking a controversial debate among crypto enthusiasts on the possibility of controlling whales’ accounts, with Binance CEO Changpeng Zhao reacting with scepticism to the news.

According to CoinMarketCap, Solana (SOL) was changing hands at $32.09 up by 10% over the past 24 hours. SOL’s market cap was $10.9bn while trading volume was at $1.8bn.

All prices are correct as of 09:00 BST (UTC +1).

17 June 2022: Solana co-founder: new fees won’t make chain more expensive

Solana Labs’ co-founder, Anatoly Yakovenko, said upcoming Solana gas fees would not render the chain more expansive.

“Once all the features roll out, there will be fees. Does that mean the network will be expensive? No!”, said Yakovenko on Twitter.

Solana's co-founder compared the implementation to a “one-light switch, a single bit or boolean that everyone wants to flip at the same time.”.

“A specific NFT auction, or specific serum market, or orca Automated Market Maker (AMM) pool is one switch. The first trader to flip it will flip it first,” he said.

“What’s important about all the prioritization features rolling out in 1.10 is that bidding to flip one switch doesn’t cause fees to go up for all the other switches,” Yakovenko said.

Solana is introducing the new fee prioritization scheme, designed to mitigate the impact of apps, services and new tech upgrades, after outages hit the chain.

According to CoinMarketCap, Solana (SOL) is trading at $31.72, down by 2.6% over the previous 24 hours. SOL market cap was $10.8bn, while trading volume was at $1.8bn, lower by around 26% over the previous 24 hours.

13 June 2022: Solana changes Twitter name after Dorsey typo

Solana developers changed their Twitter username to ‘Solano’ after a typo by Twitter co-founder Jack Dorsey that saw him refer to the blockchain by that name.

Talking about Web 3.0, Dorsey tweeted: “It’s basis on single point of failure systems (eth, solano,*) and lies being told to people about who owns and controls it.”

He later also joked about his typo: “Damn I’ll never get the spelling of sqlana right.”

Dorsey criticised Web 3.0 as he introduced the concept of a decentralised open-source platform called ‘Web5’ which the Block, his financial services and digital payments company, is developing.

The project will give users full control over their personal data and digital identities, according to the developers.

However, while Solana users appreciated the reaction from SOL developers, investors seemed to focus instead on Dorsey’s criticism, as Solana was one of the most heavily affected by the current sell-off mood among major cryptos.

According to CoinMarketCap, Solana (SOL) was changing hands at $28.04, down 13% over the past 24 hours and 33% over the past seven days. SOL market cap was $9.7bn, while trading volume was at $1.7bn, up 24% over the past 24 hours.

Prices correct as of 8:00 BST (UTC+1).

8 June 2022: Solana invests $100m in South Korean Web 3.0 start-ups

Solana Ventures and Solana Foundation launched a $100m investment and grant fund to finance South Korean Web 3.0 start-ups, according to a TechCrunch report.

The fund, backed by capital from the Solana community treasury in addition to the venture arm’s pool of capital, would focus on gaming studios, GameFi, non-fungible tokens (NFTs) and decentralised finance (DeFi) in South Korea, the website explained.

As reported by TechCrunch, gaming and NFTs account for the majority of Solana activity in South Korea, which was also a prominent area of operation for Terra.

The offer could therefore attract South Korean developers who were affected by the TerraUSD UST algorithmic stablecoin collapse in May 2022.

According to CoinMarketCap, Solana (SOL) was changing hands at $39.21, up by 2.2% over the past 24 hours. The market cap of SOL was $13.4bn while its trading volume was $1.5bn, around 18% down over the last 24 hours.

Values are correct as of 14:30 BST (UTC +1).

7 June 2022: Solana down despite efforts by developers to fix outage bug

Solana (SOL) is down 15% over the past seven days after the Solana network reported transactional slowness and congestion had led to the failure of a high volume of pending withdrawals.

In an outage report, Solana Labs explained that “under a specific set of circumstances” the processing of a particular transaction – known as a durable nonce transaction – “revealed a bug in the runtime that prevented the network from advancing”.

“This bug,” added Solana Labs, “required the durable nonce transaction to have failed, and would not have been triggered by a successful transaction.”

As the lifetime of a typical network transaction is designed to be very brief, a durable nonce transaction – according to Solana’s documentation – is a mechanism that allows the system to spend more than a few minutes validating complicated transactions.

According to CoinMarketCap, Solana (SOL) is changing hands at $39.18, down by 11.2% over the past 24 hours. SOL’s market cap was $13.3bn while trading volume was 1.8bn – 19% higher over the last 24 hours.

Values are correct as of 11:30 BST (UTC +1).

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