The Whale at the Center of the Solana DeFi Controversy has Begun Moving Funds
The move by the whale comes as a relief to many in the Solana community who were concerned about the potential for contagion in case of a liquidation. The whale had been at the center of a controversy surrounding the use of Solana’s DeFi protocols. Some had accused the whale of being reckless and irresponsible with other people’s money. However, it appears that the move may have averted a major crisis.
The controversy began when it was discovered that the whale had been using Solana’s DeFi protocols to amass a large amount of SOL tokens. This led to concerns that the whale could trigger a liquidation event that would cause losses for other users of the protocol. The situation was made worse because there appeared to be no way to prevent the whale from taking these actions.
Fortunately, it seems that the whale has decided to move its funds before any damage could be done. This is good news for everyone involved, as it means that there is no longer any risk of contagion or losses due to liquidation.
Hopefully, this will put an end to the controversy and allow everyone to focus on using Solana’s protocols for their intended purpose: providing accessible financial services to all.
The whale’s action came as a welcome relief to the Solana community, which had been anticipating possible damages in the event of a liquidation. If SOL reached $22.30, the protocol would have immediately liquidated up to 20% of the whale’s collateral, potentially causing harm to the Solana ecosystem as a whole. Protocol developers proposed a governance vote to seize control of the account and implement proper risk management measures.
The move averts the risk of contagion in case of a liquidation that could have caused hundreds of millions of dollars in losses. The anonymous wallet had deposited 95% of Solend’s pool of SOL tokens and represented 88% of USDC borrowing, but came close to a margin call last week as the SOL price dropped more than 40% to as low as $27.
It is not clear why the whale decided to start moving funds at this time, but it may be related to the outcome of the governance vote to take control of the account. In any case, the move provides some relief to those worried about potential losses in the Solana ecosystem.
Whales are often blamed for the volatility in cryptocurrency markets. While it is true that they can have a large impact on prices, it is important to remember that they are also subject to the same market forces as everyone else.
In the case of Solend, it appears that the whale may have been reacting to fears of a margin call. By moving their funds, they were able to avoid what could have been a catastrophic loss.
While this may have averted disaster for now, it is still important to keep an eye on whales and their activities in order to prevent future problems.