Our weekly crypto derivatives analytics report delves into macro events; the current state of crypto and trading signals from spot trading volume; and futures, options and perpetual contracts.

Since hitting a local bottom on Mar 11, 2025, crypto asset prices have experienced a two-week rise, following a recovery above $87K for BTC and $2K for ETH. XRP remains stable, but BTC and ETH are still below their levels from the start of the year. SOL is also down for the year, despite reaching an all-time high (ATH) in January 2025 that coincided with the 

. While derivatives markets aren't bullish yet, they've reversed much of the bearish sentiment, although demand persists for puts on BTC and ETH.

Please check out the report’s highlights.

For most of this past week, perpetual open interest remained flat, reflecting a cautious risk-off sentiment across asset classes. This changed briefly with a partial spot recovery that allowed BTC to reach $88K (a two-week high), which led to slight increases in perp open interest and trade volume primarily driven by BTC. However, trade volumes are still significantly lower than at the start of the month when US president Donald Trump proposed a crypto strategic reserve for the big four tokens.

Negative funding rates point to bearish sentiment

Despite a week of lower realized volatility and positive performance among major crypto assets, funding rates for BTC and ETH contracts have remained mostly negative, indicating that short positions are paying long positions. This reflects a bearish sentiment not present in large-cap altcoins, whose funding rates have fluctuated between positive and negative without a clear directional trend.

Implied volatility levels have dropped by 3–5 points from last week, with 30-day options trading at their lowest level since the year's start. Realized volatility is nearing the 30% low established in late February. As is typical during periods of low volatility, options market activity has decreased, with open interest remaining low and balanced between puts and calls despite about $40M in weekly expirations.

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Bybit X Block Scholes crypto derivatives analytics report (Mar 27, 2025): Cautious sentiment prevails despite price recovery

Learn about Mubarak (MUBARAK), the BNB Chain meme coin fueled by community hype and speculation over potential listings.

Mubarak (MUBARAK) is a community-driven meme coin on 

 that’s quickly gaining popularity, due to strategic community engagement and cultural branding targeted toward Middle Eastern investors. This guide explores Mubarak’s unique features, tokenomics, recent market performance and trading options.

Mubarak (MUBARAK) is a community-driven meme cryptocurrency built on BNB Chain. It was launched on the 

 Inspired by an Abu Dhabi company’s $2 billion investment in Binance, MUBARAK — which means “blessed” in Arabic — carries a unique appeal for Middle Eastern crypto markets. This targeted cultural approach distinguishes MUBARAK from other 

, giving it particular appeal in regions with growing crypto enthusiasm.

Shortly after the coin’s launch, its community quickly took control over it, guided prominently by the influential persona 

 on social media platform X. Users can also create Mubarak-themed avatars on the website, giving influential figures a dash of Middle-Eastern charm — from CZ and Portuguese soccer star Cristiano Ronaldo to beloved meme coin mascots 

. The meme coin quickly attracted attention, due to its engaging branding and strategic community management, amassing a total of 12,400 followers in just two weeks. 

What’s the source of MUBARAK’s popularity? 

MUBARAK stands out from typical meme coins, thanks to several major Binance-related events accelerating its market visibility. 

On Mar 12, 2025, Abu Dhabi investment company MGX made history by investing $2 billion in Binance. This represented the largest single investment in the whole of cryptocurrency history, signaling strong confidence in the industry. It was also a pivotal moment that firmly established the Middle East as a key player in the crypto space. Right after MGX’s mind-blowing investment, CZ tweeted several Mubarak-related posts, leading to the eventual birth of MUBARAK the very next day.

Binance Alpha, a dedicated platform for emerging and promising BNB Chain tokens, promptly listed MUBARAK on Mar 15, 2025, further validating the meme coin's potential. This integration enhanced MUBARAK's credibility, trust and market exposure, attracting a broader investor base beyond that of typical meme coin enthusiasts.

The second significant event that led to the greatest boost in its price and market cap took place when CZ personally bought 1 BNB worth of MUBARAK (around $600 at the time of purchase) on Mar 17, 2025. Both its listing and CZ’s purchase of the coin within a matter of two days pushed the coin to an all-time high (ATH) of $0.21 by Mar 18, 2025. While MUBARAK rapidly declined from its ATH to $0.13 just one day later, CZ’s cryptic endorsement for the coin briefly ignited more community excitement. 

On Mar 19, 2025, CZ sparked speculation in the Mubarak community by changing his X profile picture to feature himself wearing traditional Arab attire. The crypto community widely interpreted CZ’s subtle gesture as a potential endorsement or “hint” toward future Binance involvement. This led to a rapid increase in Mubarak's price (over 30%) within the same day as it reached $0.165 and briefly touched a $166 million market cap.

Mubarak’s straightforward and transparent tokenomics (below) are designed to foster investor confidence and community engagement.

Mubarak's simple token structure and availability on a reputable 

 (DEX) enhance accessibility, providing investors easy entry and liquidity options without relying solely on 

As of Mar 28, 2025, MUBARAK is priced at $0.096, reflecting a 55.3% decrease from its ATH of $0.21 on Mar 18, 2025, and a 237% increase from its all-time low (ATL) of $0.028 on Mar 16, 2025. It has a current market cap of $95 million and a 24-hour trading volume of $306 million.

MUBARAK’s price surged over 480% from the time of its launch, primarily due to strategic visibility from its Binance Alpha integration, speculative interest following CZ’s interactions and growing enthusiasm for meme coins in the crypto market. At its peak, MUBARAK achieved a market cap of approximately $166 million, reflecting significant investor confidence and demand.

Mubarak (MUBARAK) has quickly established itself as an influential meme coin in the crypto market, boosted significantly by strategic integrations like Binance Alpha, and speculative attention fueled by former Binance CEO Changpeng Zhao’s interactions. Its unique cultural branding, particularly appealing to Middle Eastern crypto circles, has further amplified its market visibility and adoption. However, investors must approach meme coins with caution due to these assets’ speculative nature, which often leads to considerable volatility and potential risks.

If you're interested in participating in MUBARAK’s growth story, you can trade 

, where you can participate in high-risk/high-reward Perpetual contract trading with up to 12.5x leverage.

Beginner

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Mubarak (MUBARAK): Arabic-themed BNB Chain meme coin

Margin Staked SOL is a Bybit product that allows you to earn SOL staking rewards and utilize leverage of up to 2x to amplify your earnings.

 can be a great way to earn yield in crypto, and 

 (SOL) is one of the most popular blockchain platforms for doing so. However, setting up and running a Solana validator node is technically complex. Additionally, financial requirements for Solana validators are high. While the official minimum stake is just 0.01 SOL (around $1.33), in reality, a typical Solana validator needs 

 staked just to break even — an investment of about $6.66 million (as of Mar 28, 2025).

Most crypto users who would like to benefit from staking rewards on Solana simply don’t have that kind of capital. And many don’t want the hassle of setting up a full validator node.

Back in September 2024, Bybit introduced 

 (LST) that lets you earn Solana staking rewards with minimal investment, and no need to manage a validator node.

bbSOL has been a major success, allowing Bybit users to earn staking rewards without technical or financial barriers. Now, Bybit is taking it a step further with Margin Staked SOL — a new Solana staking product that utilizes bbSOL and offers leveraged borrowing to amplify the rewards.

 is a Bybit leveraged liquid staking product that’s designed to help you earn Solana staking rewards with minimal hassle.

 Using it, you can invest your SOL and Bybit will allocate the funds to Solana blockchain validators, allowing you to earn staking rewards. When you stake through Margin Staked SOL, you receive bbSOL, an LST that serves as a deposit certificate and accrues staking rewards. Unlike standard bbSOL staking, Margin Staked SOL allows you to use 

For example, if you have 100 SOL and opt for 2x leverage, the total amount committed to Solana staking will be 300 SOL — your 100 SOL principal plus the borrowed 200 SOL. You’ll pay interest (which is variable and calculated hourly) on the borrowed amount.

Bybit allocates your total staking amount through 

 (CLOUD), Solana's leading liquid staking solution. Sanctum's 

 distributes staked funds across multiple validators to optimize the total yield.

The key advantage of Margin Staked SOL is its capacity to amplify staking rewards through leverage. In addition, you don't need to handle the technical complexities of running a Solana validator. The minimum investment required is just 0.5 SOL (around $70), drastically lower than the millions of dollars needed to run a profitable validator node in Solana's highly competitive staking ecosystem.

Upon committing your funds to Margin Staked SOL, you’ll receive the bbSOL LST. All staking rewards accrue in this asset, and you can redeem your investment at any time by exchanging bbSOL for your original SOL. After deducting interest on the borrowed funds, you’ll receive your SOL, along with all the accrued rewards. bbSOL accumulates rewards every time a Solana epoch is completed, typically taking 2–3 days.

As an LST, bbSOL normally allows you to keep your original SOL locked while using the liquid token across the Solana 

 (DeFi) ecosystem, and within Bybit products like On-Chain Earn, Bybit Savings and Crypto Loans. However, when bbSOL is issued via Margin Staked SOL, it must remain locked, and cannot be used in other Bybit or DeFi products. It acts solely as your deposit confirmation, and continues accruing rewards until you withdraw from Solana staking via Margin Staked SOL.

Interest on the borrowed funds within Margin Staked SOL is calculated hourly, with any duration under one hour rounded up to a full hour. The interest rate is variable, and updates every hour. You can check the current rate in your account under 

Rewards in Margin Staked SOL aren’t distributed immediately. Instead, they accumulate in your bbSOL, and can be redeemed at any time alongside your SOL principal investment. Bybit provides two redemption options for bbSOL:

If your PnL position declines beyond a certain level during staking, Bybit will send you a margin call notification via email, prompting you to either redeem your investment or contribute more SOL. If your PnL drops even further, an automatic stop-loss transaction will be triggered to redeem your funds and cover the loan and accrued interest. These measures are designed to protect you from unexpected losses.

Besides Margin Staked SOL, Bybit also offers another product for those who would like to earn yields from hassle-free decentralized staking: 

. There are three key differences between the two products: 

1) Unlike On-Chain Earn, Margin Staked SOL allows you to use leverage, amplifying your potential returns and risks. 

2) On-Chain Earn creates opportunities for staking on several blockchains, while Margin Staked SOL is a solution that’s designed exclusively for Solana staking.

3) Staked assets in On-Chain Earn can be withdrawn and utilized in their respective blockchain ecosystems, whereas the bbSOL from Margin Staked SOL is locked solely for yield generation, and cannot be used elsewhere. 

How to get started with Margin Staked SOL

Here’s how to get started with staking your SOL.

: In your account’s navigation pane, click on 

: On the left side, you’ll see the APR chart for the product, containing information on the Net APR; the trend over the past 1,7 or 30 days; and the highest and lowest Net APRs over a selected time period.

: On the right side, you can set options for your Margin Staked SOL (the leverage ratio and the SOL amount to transfer from your main account). You’ll see the amount of automatically calculated bbSOL you’ll receive, total borrowed amount and estimated daily yield.

to view a detailed breakdown of your bbSOL holdings. Then, click on either

: On the confirmation pop-up window, enter the amount of bbSOL you wish to redeem, or click on 

to redeem your full balance. Review the details, then click on

 to proceed, depending upon your earlier choice. 

to finalize your redemption on the redemption confirmation pop-up. Your redeemed SOL will be sent to your 

Until Apr 4, 2025, 10AM UTC, you can also take advantage of Bybit’s 

 campaign that’s dedicated to the Margin Staked SOL product. This campaign lets you earn up to 10 Lucky Draw tickets, each guaranteeing at least a 1 USDT 

, with a chance to win up to 100 USDT. In order to participate in the campaign, you must register for the event and complete a series of tasks as follows:

Bybit’s Margin Staked SOL allows you to earn Solana staking rewards without the hassle of setting up and running a validator node — all via your account’s easy-to-use interface. The leverage option is also a great way to multiply your rewards. Moreover, the minimum investment is minuscule, especially compared to running a Solana validator, and there are two easy redemption options — and all of these benefits without needing to interact with the underlying Solana blockchain!

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Bybit Margin Staked SOL: Unlock higher yields with less effort

Animoca Brands has partnered with Soneium, Sony’s Ethereum Layer 2 blockchain, to develop Moca Network’s identity layer and launch anime initiatives on Soneium.

The S&P 500 fell 0.33% as tariffs and inflation concerns weighed on markets, with energy, tech, and communication sectors leading losses. Gold hit a record $3,059 as Trump’s tariffs fueled trade war fears, boosting safe-haven demand. The Coindesk Indices, which tracks the broader crypto market, are down by 1.01%, with Bitcoin up by 0.55% and Ether down by 0.18% in the past 24 hours. Trade these markets and more with up to 500x leverage on Bybit MT5 using this 

Today's top performer is CARV, up 9.2%, as it expands globally and redefines data ownership.

CARV (CARV), founded in 2022, is a modular data layer empowering users to control their data, enhancing privacy for gaming and AI systems through its CARV Protocol and ecosystem platforms. 

, advancing AI, gaming, and data ownership with its SVM Chain, which ensures privacy, scalability, and interoperability between Ethereum and Solana. With listings on Tokocrypto and Mercado Bitcoin, CARV is targeting Southeast Asia and Latin America, where users can better control and monetize their data. The $CARV token powers governance, gas fees, and incentives, fostering a user-owned data economy. Strategic partnerships with Kite AI and ARPA enhance AI intelligence, verifiable randomness, and blockchain security.

Check out the latest prices, charts, and data of 

, Sony’s Ethereum Layer 2 blockchain, to develop Moca Network’s identity layer and launch anime initiatives on Soneium. Moca Network’s AIR SDK will integrate into Soneium, enabling decentralized identity (DID) and reputation features, starting with San FranTokyo’s Anime ID. This collaboration aims to onboard anime fans to blockchain-powered experiences and enhance engagement across anime, gaming, and Web3. Sony’s Soneium, developed by Sony Block Solutions Labs and Startale Group, seeks to merge creativity and technology, while Animoca Brands’ partnership strengthens the digital identity infrastructure for an interconnected Web3 ecosystem.

Yesterday, BTC spot ETFs saw $85M in inflows, all from non-GBTC funds.

, allowing users to earn Fragments through Galxe and Zealy quests, potentially qualifying for an airdrop. Participants must complete quests, connect wallets, and use a referral code. Points update weekly, and the program may be limited in duration.

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Animoca Brands and Sony’s Soneium partner to enhance digital identity and anime experiences in Web3

Bybit Learn

DeFi

Solend is a decentralized lending protocol running on the Solana network. Find out everything about it including its near crash in this detailed article.

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 has been garnering the market’s attention. An algorithmic, decentralized protocol for lending and borrowing built on Solana, Solend opened gateways for Solana users to increase the methods they can employ to profit from the market. With prominent investors such as 

 and many others, Solend gained remarkable traction, achieving 

 just over a month after launch, achieved even prior to liquidity mining opportunities. 

In late June 2022, Solend once again grabbed the front page of several financial news sites. However, this time the reasons weren’t as favorable. Concerns regarding the liquidation of a whale account on Solend left Solana users panic-stricken about a potential major crash, sparking intense discussions. 

In this article, we’ll explore what Solend is, how a major crash almost occurred, and the impact it’s suffered from FTX’s downfall.

, using an algorithmic method to determine interest rates and collateral amounts. 

 in August of 2021. At that time, Solana’s popularity was increasing due to its speedy transactions and low fees. The addition of a lending protocol to the Solana ecosystem attracted a lot of market interest. Users can now earn higher returns than before.

Solend starts with a fairly basic premise: Users can deposit assets to their Solend accounts to earn interest. They can also use these deposits as collateral to take out loans. The platform’s main goal is to decentralize lending. 

Borrowers don’t need to take out a formal long-term loan, or justify their need for it. Instead, the platform enables them to take short-term loans with simpler deposits and no lengthy underwriting process. 

 automatically assign lending limits and collect interest.

In order to use Solend, users need to have a Solana 

. The SOL crypto asset is the backbone of this Solana-based lending protocol. Users can move to different denominations if they want, but SOL is the native currency for the platform. Solend has various "pools" of available crypto assets that operate with different currencies. For example, the 

 lets users work with all 20 of the crypto assets the platform currently supports.

Once users have their Solana wallet connected to the lending platform and they’ve added SOL to their account, they can begin borrowing or lending various types of crypto. The 

 option lets users look at how much interest they can earn, while the 

 option tells users how much they can borrow with their current crypto stake.

Each loan that users take has a liquidation threshold. If crypto values alter in a way that causes the loan to cross the liquidation threshold, users’ assets can be liquidated. The funds then go to the lenders as collateral for the loan.

There are many other similar DeFi lending platforms, such as 

, but Solend’s Solana-based lending protocol has some special features that set it apart.

Many users find Solend helpful for investing because it has low transaction fees. You can quickly borrow and sell crypto without getting hit with excessive transaction fees. Most of the platform's fees are just protocol fees you pay with each loan. These fees contribute to an insurance fund for the platform. 

, though it can vary slightly depending on which vault you use. There are also fees you pay for any Solana network transactions. The first time you interact with the network, you pay a 0.01 SOL fee. Then, for every subsequent transaction, you pay a low fee of around 0.000005 SOL. These fees are much cheaper than transaction fees on most other sites.

Unlike many other lending platforms, Solend prioritizes scalability. It doesn't require users to stick with one type of crypto, or conduct only low-level transactions. Users can leverage a wide range of crypto assets, with more being added to the platform regularly. You can choose from a variety of cryptocurrencies, such as native coins, stablecoins and meme coins, so there’s certainly a lot of versatility.

Despite Solend’s many features, its network isn't confusing to use. One of its most impressive aspects is its streamlined dashboard. Well-organized and visually pleasing, it’s intuitive to use. Most people can get started without requiring extensive tutorials, or confusing statistics that can cause investors to make errors.

A lot of Solend's success may be linked to its 

, which the network launched so that current users can encourage others to sign up through a referral link. The original user receives a small financial bonus when a new user participates. Right now, the financial incentive is set to 20% of each loan's origination fee.

Though the platform has some great perks, using it also comes with some potential problems. Before investing in any Solend strategies, there are a few risks you need to be aware of.

Solend’s liquidations are powered by the price feeds of 

 may report incorrect prices, causing wrongful liquidations to occur.

Given that Solend is an algorithmic, decentralized protocol, the crux of its operating system lies in smart contracts that facilitate the borrowing and lending of crypto assets. However, like any other type of software, these contracts can be a point of vulnerability. They could, for instance, potentially be exploited to steal or permanently freeze funds. 

Note that such risk is inherent to all smart contracts. Despite the fact that this risk cannot be fully eliminated, there are some methods and steps taken to mitigate it:

Solend’s smart contract has undergone a code audit by 

, which pays up to $1 million if a user identifies a critical vulnerability in the code. This incentivizes responsible disclosure instead of hacking.

Solend’s treasury of $20 million can be used as insurance for the Main Pool, should any exploits or hacks cause any of the protocol’s funds to be lost.

Solend's lending protocol only works when users are depositing crypto assets for others to borrow. If there are no crypto assets left in the pool — which would be the case should 100% of the crypto asset be lent out — any future withdrawal or borrowing becomes impossible. This is called 100% utilization, and it can occasionally be an issue.

This problem is resolved as long as users pay back their loans, or more users supply crypto assets to the pool. 

Solend offers over-collateralized loans, meaning that each loan the platform offers must be backed by collateral that’s worth more than the loan itself. However, collateral value is constantly shifting. 

 may determine that your loan is below the threshold. At this point, you can either add more collateral or let your existing collateral be liquidated. However, liquidating your position incurs a penalty. If you aren't paying close attention to your loans and investments, there's a chance you could end up accidentally losing your loan — and having to pay the liquidation costs.

People who lend on Solend’s platform may potentially run into situations where their loans cannot be covered. This can happen during large-scale liquidations or periods of market turmoil. When a lot of assets are liquidated at once, their worth may not be enough to cover the user’s loans, resulting in a negative balance known as bad debt that can harm the lender. 

 to isolate newer or riskier crypto assets. These pools are used to screen crypto assets that have less liquidity and higher volatility, which creates an exploitable opportunity and is deemed a risk for the main pool. In addition, deposit limits and collateralization ratios are also managed for this group of crypto assets.

Any bad debt created is filled via the insurance fund. However, this insurance fund is topped up by transaction fees, a source which isn’t limitless and can potentially run out.

In 2022 alone, Solend has faced multiple tough situations, partly due to the volatile market conditions and the fallout from big institutions failing, which has caused various crypto assets to suffer in price. Here are the three main issues that Solend has had to deal with.

On November 2, 2022, Solend was struck by an oracle exploit, resulting in $1.26 million in bad debt.

Three of its pools — Stable, Coin98 and Kamino USDH — were affected, since the exploit revolved around the 

 (USDH). As a result, these three pools have been disabled, and the exploiter’s address has been made known to exchanges.

FTX’s Downfall and Its Impact on Solend

CEX, has thrown the market into turmoil. Given that the Solana ecosystem had close ties with Sam Bankman-Fried (SBF), the founder of FTX, the 

 (TVL) of the DeFi ecosystem has taken a beating, partly attributed to the free-falling price of SOL.

There’s also been an impact on Solend, which had a TVL of over $280 million on November 2 and has since dropped all the way down to $28 million at the time of this writing (Nov. 23, 2022). This is a result of users withdrawing from the protocol, as well as the 

In addition, Solend was faced with an issue pertaining to the liquidation of a whale account. An unidentified whale who had borrowed $44 million against $51 million worth of SOL had to be liquidated, due to the drop in value of SOL collateral. However, on-chain SOL liquidity had taken a huge beating when the price plummeted 43% in 48 hours, and Solend had difficulties liquidating the whale’s account.

In an attempt to attract depositors and incentivize borrowers to repay their loans, thereby improving liquidity, the team at Solend tried to resolve this situation by raising the interest rate on SOL to more than 2,500%. In addition, they also created a Binance account to process the SOL liquidations, since the SOL liquidity was deeper on Binance as compared to the Solana chain itself.

Despite the commendable efforts from the Solend team, which expedited the liquidation of the whale account, Solend now sits with a bad debt of $6.5 million. As Soju, Head of Business Development at Solend, wrote in Solend’s Discord channel, “It’s looking very bad now” as the situation had yet to be fully resolved.

Prior to FTX’s downfall, Solend had encountered difficulties with regard to another whale liquidation in late June 2022. This particular incident took the DeFi space by storm, was intensely discussed by the Crypto Twitter community and appeared in news stories.

One of Solend's key vulnerabilities is that users join together to create a lending pool. This can lead to problems when a single borrower, called a 

, has an outsized presence within the Solana-based lending protocol. The June crash involved a 

 borrower who had an outstanding loan of $108 million worth of USDC and USDT. The borrower's stablecoin loan was backed by $170 million worth of SOL in their Solana wallet.

The whale's loan was the largest single-user loan on Solend, taking up a huge portion of the lending pool. This was fine — as long as SOL prices were high. However, when SOL prices started tanking around June 15, this huge loan became a problem. SOL prices were dropping to $27, so the whale's loan was quickly approaching its liquidating threshold.

Solend’s Developers Try Notifying the Whale

When Solend's developers noticed this issue, their first plan was to notify the lender of the impending liquidation. At this point, another one of the platform's vulnerabilities became apparent: Solend is entirely anonymous, so there’s no way to contact a user — outside of sending a message to their account. Unfortunately for the developers, the whale wasn't checking the messages sent to their own account.

If SOL's price were to reach $22.30 without the whale taking any action, their collateral would have to be liquidated, resulting in over $21 million of SOL being dumped at one time. Users feared a serious amount of fallout for the market. Though SOL is a fairly robust blockchain, with a market cap of around $11 billion, such a huge sale would have caused its value to tank even further.

It was a race against time, with the group desperately trying to notify the lender before the liquidation was set in motion. After private methods of contact failed, they turned to the internet. The developers posted on Reddit and Twitter, begging the borrower to contact them. They even sent an on-chain transaction with a memo, asking the whale to talk to them about the issue. Of course, making the issue public caused further problems. Users were spooked and started to pull their funds, resulting in fewer tokens in the pool and more funds being frozen.

Eventually, Solend was able to use an intermediary to contact the whale and get them to add more collateral to their account. However, before this took place, the platform had been seeking other solutions. They ended up enacting their first 

 (DAO) vote. This essentially required users to join together and vote on proposed solutions to the problem as described below.

Proposal 1: SLND1 — Mitigate Risk From Whales

Solend's first proposed measure was an "emergency powers" package. Named 

, it would have given Solend’s developers more control over users' accounts, allowing the platform to identify whales who represent more than 20% of the borrowing in any given pool. Solend would then have emergency power to take over these accounts in the event of any liquidation. The platform would be able to liquidate the account more slowly, so that lenders would get paid but SOL shares wouldn’t get dumped 

. At the time, this proposal was met with a lot of favor. Solend got just enough voting participation to meet their 1% quorum requirement, and the emergency ballot passed by 97.5%. 

However, users quickly found out that some unsavory dealings had been going on behind the scenes: Struggling to achieve enough user participation to reach a quorum, the platform found a user who owned over 1% of all the turnout tokens. This user’s outsized number of votes swayed the results of the election, while many members of the Solend community had been outspoken about how much they disliked the measure. They felt that it gave the platform too much control over individual users’ accounts, contesting the ethos of decentralization.

Proposal 2: SLND2 — Invalidate SLND1 & Increase Voting Time

Since there was so much public outcry over SLND1, the developers proposed a new measure, 

, which would essentially reverse everything that had been agreed to with SLND1. The new measure proposed both to cancel the idea of giving the Solend team more power over user accounts, and to increase the overall voting time.

This ballot ran into a similar problem as the first proposal. Once again, users were divided, and it mostly came down to the input of the same user, with their outsized voting power. This user initially said they would vote "No" on SLND2, because they didn't want to cave to public pressure. However, at the last minute, they decided to vote "Yes” and the proposal passed. The platform was no longer allowed to access user accounts in an emergency, while users were given more time on future votes.

Proposal 3: SLND3 — Introduce Account Borrowing Limit

After the first two controversial votes, Solend users were becoming fairly anxious. Fortunately, the platform was able to finally get in contact with the whale and work to resolve the ongoing situation. While this was happening, the team also began to work on a new proposal that would hopefully reduce the risks of another such occurrence.

’s ballot measure proposed to reduce borrowing limits for all users. The proposal suggested that, in the future, there should be a borrower ceiling of $50 million. This would hopefully prevent one borrower from being able to take up so many funds from a lending pool. The ballot passed on June 21, and the proposed limit went into effect. Though there was once again the issue of a single user deciding the vote, there was less public outcry because most people believed the new measure was a wise decision.

It's hard to clearly define Solend's effect on SOL, since the two are so closely related. SOL was definitely on the downturn before the lending protocol disaster. In fact, the Solana network crash was the main reason that all of the whale's SOL collateral was almost liquidated in the first place. 

During the days of constant, contradictory proposals, market uncertainty continued to drive SOL prices down. Many investors dumped their SOL out of fear that its value was about to drop further. However, even when the near crash was prevented, as a portion of the whale’s debt was moved to another protocol, the price of SOL didn’t immediately recover. It appeared that stabilizing Solend had prevented a bigger crash, but was unable to improve Solana’s ecosystem as a whole. 

The situation with Solend highlighted some key problems with the protocol. Many investors are now wary of lending to users, as the whale issue highlighted just how easily one bad call could destabilize any lending pool. It’s somewhat reassuring to see that the developers were able to handle things, and to keep users from losing money. However, if there’s a reoccurrence, the outcome may be very different. Despite the newer borrowing limits, there still isn't much regulation in place to prevent the same problem from happening again.

That said, there's no indication that borrowing on the platform or using it to leverage cryptos against each other is potentially disastrous. These sorts of activities don't necessarily run the same risk of drastic harm from a single large liquidation. However, the June 2022 crash did cause a limited lending pool. This could be a problem for investors whose plans involve acting quickly and constantly taking out various loans.

In addition to the practical issue of one whale borrower bringing things to a halt, the June crash also introduced some philosophical problems. Many investors had been drawn to the lending protocol because it claimed to be a DeFi program in which financial decisions weren't based on human error. 

However, all of the SLND proposals ended up coming down to a single user whose votes were heavily influenced by both the developer team and the Twitter outrage. The ability of one voter to purchase so much power shows that Solend may end up being influenced by personal bias and real-world politics just as much as the traditional financial system it criticizes.

SLND’s price has dropped by roughly 97% since its peak in November 2021. Given the current volatile market conditions, and potential contagion effects that could arise from FTX’s fallout, users should be careful when deciding whether to invest in SLND.

Ultimately, Solend’s decentralized lending and borrowing protocol has some exciting features. However, the recent near-crash shows the potential dangers of DeFi lending platforms. Despite claims that Solend’s program is decentralized and algorithmic, it ended up relying entirely on user behavior. Since it's lacking in regulations, this opens up vulnerabilities that can cause real financial damage. Solend’s lending protocol is certainly intriguing to tinker around with, but we'd recommend caution when working with large amounts of funds.

What Is Solend and How Did a Near Crash Almost Cripple It?

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