DEX at Solana takes control of the whale wallet



by   |  VIEW 588

DEX at Solana takes control of the whale wallet

The proposal, dubbed “SLND1: Alleviate the risk of whales,” was abruptly launched on Sunday without announcement, and the vote ended with a 97% approval rating. The scandal comes after last week's sudden layoffs of Coinbase and BlockFi and the debacle of the liquidation of Three Arrows Capital.

In addition to the turmoil of unexpected volatility and market sell-offs, rapid changes to the alleged decentralized autonomous organization, or DAO, indicate that the crypto is not as “decentralized” as its users may have thought.

Proposal details include the address of Whale’s wallet and deeper information on why this account caused problems for Solend. Part of the main problem is that this large account is about to be liquidated which would burden Solend and its users.

According to the proposal, "If SOL drops to $ 22.30, whale's account becomes liquidated by up to 20% of their loans ($ 21 million)." The aim of the proposal is to take control of the whale account and carry out liquidation through an OTC transaction.

The proposal was immediately followed by criticism from Twitter as usual. Arguments include the damage this move could cause to the overall picture of DeFi. Taking control of one of Solend’s wallets means that the fundamental principles of DeFi are falling apart.

This move also leaves a stain on Solend’s ability to manage his collateral. As Emin Gün Sirer, founder and CEO of Ava Labs, pointed out, additional consequences of this move could include cascading liquidations in the decentralized stock exchange (DEX) order book if the price of the Solana token falls too low.

Perhaps multiple cracks in the crypto ecosystem are beginning to be discovered through urgent, forced, and manipulated decisions made in a hurry. Taking control of DeFi wallets are far from the noble ideas that underlie the crypto culture of decentralization and such moves are likely to bring further criticism and ridicule in the sector.