Solana DeFi App Votes Again to Stop Whale Account Takeover

Share some Bitpinas love:

A day after Solend’s sudden controversial governance proposal to take over the DeFi lending protocol’s largest wallet, the users of the Solana-based borrowing and lending service conducted a second voting and passed the governance proposal SLND2 that invalidates the controversial “emergency power” proposal.

(What is Solend? Why did it take over a whale account? Check our first article here.)

The second proposal received 1,480,264 “yes” votes and 3,535 “no” votes with a majority of 99.8%. To further push the votes ultimately making up 90%, one wallet paid $700,000 for additional voting power.

To address the backlash of the sudden voting and implementation of the prior governance vote, SLND2 will also increase governance voting time to one day and give the Solana users time to take less drastic measures on a large on-chain liquidation.

“We recognize that a voting time of 1 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 ask our community to be active in governance in the next few days. Voting time will be revisited in a future proposal,” Solana Co-founder Rooter wrote in a  blog.

The SLND1: Mitigate Risk From Whale was meant to allow the funds of its biggest account–a $100 million+ whale with a potential chaotic on-chain liquidation– to be withdrawn instead of automatically liquidated on the open market; the voting was closed with a 97% approval rating. 

However, Solend users have reportedly been incentivized to vote with “50K SLND distributed proportionally among voters through an airdrop.” (Read more: Solana DeFi Platform SOLEND Approves Whale Wallet Takeover, Raising Fears About ‘Decentralization’)

According to the proposal, it was initiated because the platform was “unable to get the whale to reduce their risk, or even get in contact with them.”

“With the way things are trending with the whale’s unresponsiveness, it’s clear action must be taken to mitigate risk,” the proposal stated.

The action, however, received criticism from the crypto community for being “contrary in every way to the DeFi ethos” according to Delphi Labs General Counsel Gabriel Shapiro.

According to the Solend team, they will now “work on a new proposal that does not involve emergency powers to take over an account.”

Currently, the third proposal “SLND3: Introduce Account Borrow Limit” is conducting its voting. The proposal aims to impose restrictions such as a per-account borrow limit of $50M and any debt above this limit will be eligible for liquidation, regardless of collateral value.

This article is published on BitPinas: Solana DeFi App Votes Again to Stop Whale Account Takeover

Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.

Share some Bitpinas love:
Follow on social and subscribe to our newsletter