Solana on the verge of collapse – Solend Community votes for Whale Hacking
The decentralized finance (DeFi) sector continues to be in a fever, as the general decline in the market, the remortgaging of assets and a high proportion of margin transactions lead to the collapse of projects. In three months, the volume of blocked funds in DeFi has decreased by 64% to $57 billion, and new methods of saving individual platforms risk a complete loss of investor confidence in this area.
This time, the Solend platform, which is based on Solana, and whose total assets exceeded $800 million in April, distinguished itself. Despite the declared decentralization and autonomy, the platform put to the vote a proposal to change the smart contract and expel the largest whale with the forced closure of positions on the OTC market.
According to the management, the whale blocked 5.7 million SOL mainly in stablecoins to obtain a guaranteed annual return. As SOL declines, the volume of margin collateral for whale positions falls. When SOL reaches $22.3, the platform must liquidate the coins deposited by the whale – the so-called stop-out.
The problem is that the developers do not want to get involved with the sale of such a volume of SOL (at the time of liquidation about $ 21 million) through their own platform. For Solend, these are additional risks due to a lack of liquidity and fear of a collapse of SOL, which is the base coin. Therefore, on June 19, the management, without prior announcement, invited the community to vote for changing the smart contract to use Keith’s account without permission and realize his deposit through over-the-counter (OTC) tables.
Due to the haste in voting, it was barely possible to overcome the quorum of 1%, and 86% of the weight belongs to one address.
Changing a smart contract to fix an emergency situation is not an isolated case.
At one time, Vitalik Buterin initiated a hard fork of Ethereum due to a hacker attack on The DAO foundation. However, many users regard such steps as an attempt on decentralization and the main postulate of the cryptocurrency world “code is law”.