Decentralized Autonomous Organization (DAO) Governing Soland, a solana-based lending platform, has invalidated a previous vote that allowed it to access a “whale” wallet that was allegedly jeopardizing the protocol.
Whale in question is the largest user of the platform, having deposited 5.7 million SOL – which is more than 95% of all Soland deposits – to borrow approximately $108 million worth of USDC and USDT.
According to Soland, if the SOL drops to US$22.30, the wallet risks liquidation of up to 20% of its borrowings, or about US$21 million.
“It will be difficult for the market to absorb such an impact as liquidators usually sell in the market” DEXes, In the worst-case scenario, Soland could end up with bad debts,” the Soland team said, giving its users only six hours to vote on the proposal to take the wallet.
The platform also argued that it was “unable to reduce its exposure to the whales, or even to come into contact with them.”
“The way things are going with the non-reaction of whales, this clear action must be taken to reduce the risk,” read the initial proposal.
While the initial vote was passed, it faced fierce backlash from members of the crypto community; Delphi Labs General Counsel Gabriel Shapiro accused Solande of setting a bad precedent that was not only “the opposite in every way” DeFiethos,” but also illegal.
my mind is blown by this
Not only is this contrary to the “DeFi” ethos in every way, but it is also illegal.
At *best*, it’s trespassing/conversion
…the potential for a lot worse depending on how things go… https://t.co/FK3lyb495X
As of Monday, Soland asked users to vote on a new proposal to reverse an earlier vote, which received 99.8% of the “yes” vote.
“We are hearing your criticism about SLND1 and the way it was organized,” Soland co-founder Rutgers wrote in a blog post. “With the price of SOL rising steadily, it is giving us some time to gather more feedback and consider alternatives.”
The new vote extended the regime’s voting time by one day, while the Soland team is expected to “present a new proposal that does not include emergency powers to take an account.”
The native token of the Solana blockchain, SOL, is currently changing hands at just over $36, up nearly 12% over the past 24 hours.
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