Some predict that if Solend cannot take over the account, it will trigger a meltdown, sending SOL’s price to zero.
Solend, Solana-based decentralized finance (DeFi) lending system, has called for a new governance vote to overturn a recently-approved proposal that gives Solend Labs “emergency powers” to access a whale’s wallet to escape liquidation.
The crypto lending platform launched a governance vote on Sunday titled “SLND1 : Mitigate Risk From Whale.” It allowed Solend to lessen the market risk associated with the whale’s liquidation by allowing the lending platform access to the whale’s wallet and the liquidations to take place over the counter.
If the price of SOL declines and the whale is liquidated, according to Solend, the lending platform may “end up with bad debt” and put pressure on the Solana network. Members of the community were outraged when the idea was accepted.
The Solend team initiated a second governance proposal vote to invalidate the previously-approved proposal after the community denounced the move, calling it the polar opposite of what DeFi should be and plain illegal. The proposition was defeated with 1,480,264 votes in support of dismissing the SLND1 proposal.
The new plan nullifies the prior vote and forces Solend to devise a different solution that does not include forcibly taking over an account. It also cuts down the time it takes to vote on governance to one day.
The scenario has placed the crypto lending platform in a difficult position. Solend could save Solana from a DeFi implosion if he took over the whale’s wallet and was given emergency powers. However, it would demonstrate that anyone’s assets can be seized within the network, potentially leading to a boycott. Cryptokk.eth posted on Twitter:
On the other hand, some predict that if the Solend team cannot address the hazards surrounding the whale’s account, a Solana meltdown will occur, causing SOL’s price to plummet.