The Solend landing platform team has suggested that the community introduce special margin requirements for large users. The developers have also asked for temporary authority to manage the whale account, which accounts for 95% of all deposits in Solana (SOL) and 86% of loans in USD Coin (USDC).
This proposal aims to mitigate risk imposed by a user with a large margin position on Solend.
A copy of the proposal is available here https://t.co/BlKRp7P83g
— Solend (we're hiring!) (@solendprotocol) June 19, 2022
Earlier, the founder of Solend under the nickname Rooter said that one of the users keeps $170 on the deposit of the platform million in SOL, and also has a $108 million debt position in stablecoins. According to him, the liquidation price of SOL for this participant is $22.27. At the time of writing, the cryptocurrency is trading near $30, according to CoinGecko.
3/ their liquidation price is $22.27. we still have a ways to go but want to be ready for the worst case scenario
if the whale were to get liquidated, it'd start with a partial liquidation capped at 20% of the outstanding borrows (~$21M)
— Rooter | Solend (hiring!) (@0xrooter) June 18, 2022
1/ in a worst case scenario, solend users lose $100M and the entire treasury of $20M is depleted. this proposal aims to prevent that.
we've spent hours debating different options and honestly this seems like the best path forward.
it's not up to us tho, it's up to the DAO. https://t.co/MsMQ5Gw4vG
— Rooter | Solend (hiring!) (@0xrooter) June 19, 2022
🚨 Here we go again🚨
152k Ether 2% away from being liquidated. https://t.co/UGQpueDdUc https://t.co/EAyf6kviHm pic.twitter.com/C89BTJ9bNL
— DeFiyst (@DeFiyst) June 18, 2022
At the moment, quotes have reached the specified value. however, the position was not forcibly closed as Aave exclusively uses the Chainlink USDT/ETH price oracle. The latter assumes a 1% deviation threshold before updating the data, so the price has had time to rise.
At the time of writing, Ethereum is trading above $1000.
ETH/USDT Hourly Chart of Binance Exchange. Data: TradingView.
However, not all players were so lucky. For example, on the Liquity landing platform, on June 18, liquidation of a position was recorded for 71,863 ETH at a price of just over $927, according to Dune Analytics.
At the same time, Celsius Network continues to reduce debts on Aave and completely closed the position in LINK on the platform MakerDAO.
Amidst the noise surrounding the Aave ETH whale teetering on the edge of liquidation, and the inactive Solend user getting worryingly close also, @CelsiusNetwork have fully paid down their $LINK Maker position ($37m).
Interesting.https://t.co/2MuuWEMJ9Y https://t.co/51rqJELZSZ pic.twitter.com/1DzPHHsN8w
— DeFiyst (@DeFiyst) June 18, 2022
Recall, Georgetown University Law Professor Adam Levitin called the bankruptcy of Celsius almost inevitable.
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