Solend, ’emergency powers,’ governance vote- Making sense of it all

ambcrypto.com:

The broader crypto lending and the staking markets underwent one of the worst crises in history. Different networks suffered repercussions because of liquidation havoc.

On 19 June, Solend Protocol, a DeFi network used for borrowing and lending crypto-assets such as Solana [SOL] was affected. Fearing extreme sell-offs, the network released initiated proposals to avoid a cascade of possible liquidations.

Earlier, the Solend protocol planned to overtake the whale accounts with emergency powers. However, it faced a huge backlash from the community. While the liquidity risk continues to hover over Solend, it has come with a third proposal SLND3. This proposal seeks to put a cap on the borrowing limit and reduce the maximum liquidations.

— Solend (we're hiring!) (@solendprotocol) June 20, 2022

SLND3 proposal would incorporate some amendments asspecified in the blog. Proposed to introduce a per-account borrow limit of $50M, any debt above this limit will be eligible for liquidation, regardless of collateral value; temporarily reduce the maximum liquidation close factor from 20% to 1%.

For its third proposal, Solend has so far reduced nearly 5,000 community votes with 98% in favor. The announcement noted,

“Solend is reaching out to market makers to help provide better on-chain liquidity. This combined with our proposals should reduce DEX market impact to a manageable level.”

If approved, the proposal would take effect. ‘Due to the need to move quickly, consider the 24-hour voting period as notice for users to reduce their borrow positions,’ the team added.

Solend team continued to post new proposals and ask interested users to vote.