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Solana Whale Transfers $25 Million To Avoid Defi Protocol Risk Solend

The Solana whale, which was on the verge of being liquidated last week, has begun transferring cash to the Solana-based DeFi protocol Solend, where they were previously kept. The Solend whale has shifted $25 million of its debt to Mango markets, according to the Solend team on Tuesday.

This was the consequence of Solend’s efforts to encourage the anonymous whale (3oSE) to spread their lending position across a second lending platform, according to the team.

Solend has avoided the full impact of a potential forced liquidation by transferring a portion of its stock to Mango Markets. According to Solend, the crisis has not been totally avoided because this just limits exposure to Solend; the trading position and its potential liquidation remain alive.

“This doesn’t completely solve the problem however, since the large liquidation wall still exists,” Solend wrote. “We’re in touch with the Mango team and 3oSE…uRbE to figure out a long term plan.”

crypto-whale

The problem began when a Solend user borrowed $108 million in stablecoins. The loan was secured by 5.7 million solana ($215 million), or 95 percent of the SOL deposits in Solend’s main lending pool.

However, when the market plummeted, this loan faced liquidation. This was predicted to happen if the price of SOL fell to $22.30. According to the Solend team, an on-chain liquidation of this size would be extremely risky. 

Later, when Solend suggested taking over the user’s position and manually liquidating it in an over-the-counter (OTC) sale, it drew criticism. It then abandoned that suggestion due to concerns that it may jeopardize the degree of decentralization, which prompted it to search for an alternate remedy.