The infamous whale account causing a turmoil at Solana’s DeFi platform system Solend protocol has now started to move funds.
This move by the whale account reduces the risk of contagion in the event of a liquidation, which might have resulted in a big crisis for Solend protocol.
Actually the whale account is in talks with Solend after the platform tried to take over the account and later had to invalidate the proposal due to huge backlash from the community.
Now the whale account has taken Solend protocol’s advice and distributed their position among multiple decentralized and centralized lending venues.
The account has since then transferred $25 million in USDC debt to Mango Markets. Mango Markets are a borrowing, lending and trading DeFi protocol on Solana.
Solend states that this move alone doesn’t solve the potential liquidation issue. Now they’re discussing a long-term plan with the Mango team and the whale account.
The whale account had 5.7M SOL deposited ($170M) accounting for 95% of the main pool deposits, and 108M USDC and USDT borrowed against it.
The whale account would become liquidatable for as much as 20% of borrowings if SOL dropped to $22.30.
At the time of writing, SOL is trading at a price of $37. This means that the liquidation thresholds are far lower than they are now, allowing the wallet’s user to take the required precautions to avoid sudden losses in the event of liquidation.
“This shows commitment to working things out and solves Solend’s USDC utilization problem,” Solend tweeted regarding their talks with the whale.
Just this morning, Solana protocol issued a new proposal to introduce an account borrow limit as Solend, noting that the whale account still continues “to impose a heavy strain on Solend users.”