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A sizable lending position on the Solana-based lending platform Solend is currently underwater, but infrastructural problems are keeping it from being effectively liquidated. Solend consequently runs the chance of racking up a bad loan.
Solend Liquidation
The loan is a part of Solend's primary lending pool. The value of the collateral utilized as the loan's security has decreased due to a drastic decline in Solana ($SOL) prices, which have dropped by almost 50% in the last three days. Normally, other market players would have sold the loan to pay off the debt. However, the platform has encountered oracle challenges linked to network congestion, delaying their attempts. The owner of this loan is a significant user who also occupies the strongest position in the primary pool. In exchange for $32.6 million in $SOL security, the user currently pays the protocol $29.7 million in USDC. The amount of the stake exceeds Solend's 85% liquidation limit, which is $27.6 million. In order to reduce the loan's balance to below the liquidation level, the protocol must liquidate roughly $2 million in $SOL collateral.
Solution of Congestion Problems
The project made it clear that, despite the technical difficulties, the owner of the substantial loan is being steadily liquidated. Solend tweeted that its congestion problems had been resolved and that partial insolvencies of the whale account had been proceeding without significant problems. https://twitter.com/solendprotocol/status/1590199684659703808 The protocol is having trouble finishing because of Solana's congestion problems, even though it has been removing security from the position to safeguard its holdings.