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This is entirely about a single a project trying to prevent cascading issues within itself. Claiming this is about Solana itself is a lie and this post should b

This is entirely about a single a project trying to prevent cascading issues within itself. Claiming this is about Solana itself is a lie and this post should be deleted.

laweijfmvo 4y ago
> This is entirely about a single a project trying to prevent cascading issues within itself. Claiming this is about Solana itself is a lie and this post should be deleted. I'm trying to understand this, but it's beyond me. Can someone ELI5? Here's what I get: Someone borrowed $108M (in USDC and USDT) and put up 5.7M SOL ($170M USD) as collateral, with the terms that if SOL should fall the lender can liquidate the SOL to recoup their loss; in this case, if SOL reaches $22.30, they can recoup ~$20M USD. This all sounds like a perfectly normal lending process. SOL is (was) currently at $32, but the claim is that the borrower seems to have no interest in taking any action and allowing the liquidation to occur. Question: who's making this claim and on what basis? The next claim is that this liquidation, if it were allowed to occur, would cause the price of SOL to fall even further, which also makes sense. The market cap of Solana seems to be ~11.5B (billion with a B); $20M shouldn't be the end of the world? 24hr volume is ~$2B, so this would be 1%. Question: why is allowing this liquidation the end of the world? Last question: what does any of this have to do with Solend? Are they the ones that lent the $108M out, or are they just the middle man? If the former, is the concern that they won't be able to recoup their losses under the terms of the contract and falling price of SOL?
- yieldcrv 4y ago
  > Question: who's making this claim and on what basis? The Solend Team. https://realms.today/dao/7sf3tcWm58vhtkJMwuw2P3T6UBX7UE5VKxPMnXJUZ1Hn/proposal/HuaL6cDtuNtfnJgvwMnYiZDHVCoLAuDtVFgJD8kYChJ4 https://realms.today/dao/7sf3tcWm58vhtkJMwuw2P3T6UBX7UE5VKxP... > Question: why is allowing this liquidation the end of the world? Its not. They believe a function in their own project will cause the underlying Solana blockchain to have some uptime issues, because a similar function has been a culprit in the past, according to them. (Solana has failed to produce blocks periodically, I haven't followed more specifically why) This function will be called autonomously if the price of the collateral in question continues to decline. The rebuttals are: a) a big cascading liquidation being interrupted by block production issues will just resume as block production resumes. so that's stupid. Solana goes down all the time, if other applications there can't handle that by now that's those application's problem. b) DEX liquidity isn't all liquidity. So if $170m crashes the price on a DEX, that's just an opportunity for anybody paying attention to buy Solana cheap on the DEX and sell it for more on centralized exchanges like Binance and Coinbase. Its not Solend's problem. It is a completely unnecessary and amateurish "vote". > what does any of this have to do with Solend? Are they the ones that lent the $108M out, or are they just the middle man? They're the service being used where people deposit collateral, yes.
  - laweijfmvo 4y ago
    > Its not Solend's problem. Right, that's my confusion. Which is what makes the whole thing smell fishy.
    - yieldcrv 4y ago
      Its amateur hour. Currently governance projects have no bylaws to constrict the nature of a proposal, and they have no continuity between proposals to restrict future proposals, and there is no arbiter, and proposal outcomes mostly have to be coded by the original team so people are trusting them, and there is no agreed upon compensation path for a third party implementation team.

This is entirely about a single a project trying to prevent cascading issues within itself. Claiming this is about Solana itself is a lie and this post should be deleted.

laweijfmvo 4y ago

> This is entirely about a single a project trying to prevent cascading issues within itself. Claiming this is about Solana itself is a lie and this post should be deleted. I'm trying to understand this, but it's beyond me. Can someone ELI5? Here's what I get: Someone borrowed $108M (in USDC and USDT) and put up 5.7M SOL ($170M USD) as collateral, with the terms that if SOL should fall the lender can liquidate the SOL to recoup their loss; in this case, if SOL reaches $22.30, they can recoup ~$20M USD. This all sounds like a perfectly normal lending process. SOL is (was) currently at $32, but the claim is that the borrower seems to have no interest in taking any action and allowing the liquidation to occur. Question: who's making this claim and on what basis? The next claim is that this liquidation, if it were allowed to occur, would cause the price of SOL to fall even further, which also makes sense. The market cap of Solana seems to be ~11.5B (billion with a B); $20M shouldn't be the end of the world? 24hr volume is ~$2B, so this would be 1%. Question: why is allowing this liquidation the end of the world? Last question: what does any of this have to do with Solend? Are they the ones that lent the $108M out, or are they just the middle man? If the former, is the concern that they won't be able to recoup their losses under the terms of the contract and falling price of SOL?

yieldcrv 4y ago
> Question: who's making this claim and on what basis? The Solend Team. https://realms.today/dao/7sf3tcWm58vhtkJMwuw2P3T6UBX7UE5VKxPMnXJUZ1Hn/proposal/HuaL6cDtuNtfnJgvwMnYiZDHVCoLAuDtVFgJD8kYChJ4 https://realms.today/dao/7sf3tcWm58vhtkJMwuw2P3T6UBX7UE5VKxP... > Question: why is allowing this liquidation the end of the world? Its not. They believe a function in their own project will cause the underlying Solana blockchain to have some uptime issues, because a similar function has been a culprit in the past, according to them. (Solana has failed to produce blocks periodically, I haven't followed more specifically why) This function will be called autonomously if the price of the collateral in question continues to decline. The rebuttals are: a) a big cascading liquidation being interrupted by block production issues will just resume as block production resumes. so that's stupid. Solana goes down all the time, if other applications there can't handle that by now that's those application's problem. b) DEX liquidity isn't all liquidity. So if $170m crashes the price on a DEX, that's just an opportunity for anybody paying attention to buy Solana cheap on the DEX and sell it for more on centralized exchanges like Binance and Coinbase. Its not Solend's problem. It is a completely unnecessary and amateurish "vote". > what does any of this have to do with Solend? Are they the ones that lent the $108M out, or are they just the middle man? They're the service being used where people deposit collateral, yes.
- laweijfmvo 4y ago
  > Its not Solend's problem. Right, that's my confusion. Which is what makes the whole thing smell fishy.
  - yieldcrv 4y ago
    Its amateur hour. Currently governance projects have no bylaws to constrict the nature of a proposal, and they have no continuity between proposals to restrict future proposals, and there is no arbiter, and proposal outcomes mostly have to be coded by the original team so people are trusting them, and there is no agreed upon compensation path for a third party implementation team.