Two community proposals by Solana-based decentralized finance (DeFi) protocol Soland were recently voted down to reduce the risk of whales operating large margin positions. However, the second proposal has now opposed the initial version.
The Lending and Lending Facilitation Protocol on Solana previously proposed SLND1 to reduce user and market risk. The community was asked to vote on special margin requirements for large whales representing more than 20% of borrowers.
The proposal argued that “allowing liquidations of this size to occur on-chain is extremely risky.” Furthermore, “the liquidity of the DEX is not deep enough to handle a sale of this size and this could create a cascading effect.”
SLND1 overturned; why over here
Therefore, SLND1 will provide Soland Labs with emergency power to temporarily take over Whale’s accounts in order to allow over-the-counter liquidations.
Soland claimed that the proposal was issued only after several attempts to come into contact with the whale. It had said, “Despite our efforts, we have been unable to reduce their exposure to whales, or even their exposure to them. The way things are going with the irresponsibility of the whales, this clear action must be taken to reduce the risk.”
However, after much criticism and despite 97.5% community support for the proposal, SLND1 was overturned.
That said, the vast majority of 99.8% of users within the community supported the proposal under SLND2, which considered SLND1 invalid. In addition, the new proposal extended the governance voting time by one day, removing the emergency powers to handle the account by Soland Labs.
Most support SLND2 as a better option
The forum said, “We are hearing your criticisms about SLND1 and how it is organized. With the price of SOL rising steadily, we are taking some time to gather more feedback and consider alternatives .
That said, one user who approved of SLND2 commented that “it’s okay to change margin requirements, not a big no-no to take into account.” Conversely, another user who disagreed with overturning the initial motion commented, “Proposition 1 passed. Didn’t like it, but now you can’t ignore it. Even if the law says so. ,
At the time of writing, Soland has a market capitalization of over $13 million, with a net worth of locks (TVL) of approximately $267 million. The coin, ranked 721st on CoinGecko, is hovering between the $0.64 and $0.68 price levels at press time.
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