Coin News

Solana (SOL) Could Face Catastrophe In Foreseeable Future, Here's Why

21 Jun, 20222 min readOther
Solana (SOL) Could Face Catastrophe In Foreseeable Future, Here's Why

The whole story with the "exemption" of a whale on Solend platform shook the whole cryptocurrency industry and raised big questions about the decentralized nature of the whole DeFi industry.

The main justification Solend chose for taking control of a wallet that is not theirs was the massive liquidation that could happen and put the entire network in danger as Solana is notorious for its constant downtimes and network outages whenever the slightest load appears.

The anonymous whale who voted in SLND1 and again in SLND2 has this to say publicly in the Solend Discord. — Solend (we're hiring!) (@solendprotocol) June 20, 2022

In order to avoid that, Solend launched a vote on the network, proposing to take control over the whale's wallet and forcibly liquidate its position to avoid risks if SOL's price plunges lower. That was the moment when everything started looking suspicious.

According to on-chain data, a single user issued over 90% of the votes on the proposal. Essentially, the fate of $270 million of users' funds was controlled by a single wallet, which goes against every principle of decentralization that the whole DeFi industry is rooting for.

Later on, the new voting started with a proposal to dismiss the previous results and remove the previous voter's contribution, who also spoke out in the Discord channel, stating he or she would rather sacrifice $120 million of retail dollars instead of putting the entire industry at risk to simply follow the decentralization narrative and let someone "gamble."

The whole situation once again shows Solana's problem with centralization that may ruin the network's future and growth potential as even its biggest supporter, SBF, told is his Twitter followers that the whole situation is unacceptable, while being accused of "saving his bags."

Source

Subscribe to get our top stories

Coin News
App StoreApp Store