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$190 million of user funds have exited Solana-based lending protocol MarginFi over the last two days amid an abrupt resignation of the platform’s CEO and followed by accusations of wrongdoing from its competitors.
Withdrawals from the Solana-based DeFi protocol have reached record levels amid an apparent management meltdown and claims from competitors that it hasn’t met its promises.
On April 10, the now-former CEO of MarginFi, Edgar Pavlovsky, suddenly announced he had resigned from MarginFi, citing disputes that had arisen from both within his firm and from outside of it.
“I resigned from mrgn today. From working on MarginFi, from the research arm, from it all,” said Pavlovsky, adding:
“I don’t agree with the way things have been done internally or externally.”
I resigned from mrgn today. From working on marginfi, from the research arm, from it all.
It's a world class team — it really is — but I don't agree with the way things have been done internally or externally. I've said it many times and I'll say it again, but those of us who…
— edgar ◼️ (@edgarpavlovsky) April 10, 2024
Hours earlier, Pavlovsky had been trading blows with users on X who had been requesting that the protocol launch its long-anticipated MRGN governance token.
“After today, feels maximally right to push back any kind of token. Will see what I can do internally to brick this,” wrote Pavlovsky in a now-deleted post to X on April 11, which also saw a heated response from the community.
In the wake of the controversy — seemingly worsened by a stream of public insults from the former CEO — withdrawals from MarginFi have reached as high as $191 million in the last 48 hours, according to Dune Analytics data.
Competing Protocols Accuse MarginFi of Spreading Lies
The controversy only escalated as the teams from other Solana-based lending protocols began posting accusations that the MarginFi protocol hadn’t been meeting their stated requirements.
SolBlaze claimed that MarginFi had allegedly failed to replenish BLZE token emissions for its users.
Failing to replenish emissions for the BLZE token meant that BLZE lenders were not paid yield on their deposits within a specific time frame.
MarginFi co-founder MacBrennan Peet however defended against the claims, arguing that recent delays were due to “chain congestion” and user safety concerns.
Peet described SolBlaze’s accusations as “completely wrong” and claimed his platform had consistently paid out more than its required amount to BLZE lenders and borrowers.
“Marginfi has failed to replenish BLZE over the last 3 days, not three weeks. Yes, this is because of chain congestion and prioritizing user safety,” he added.
Meanwhile, Solend founder Rooter took to X to share accusations that MarginFi has allegedly attempted to “blackball” Solend by spreading inaccurate information about Solend’s total value locked and attacking its oracles.
Despite the internal discord that was catapulted into public view, MarginFi has reassured its users that all of its products were unaffected by Pavlovsky’s departure, adding that the team remained committed to growing the protocol moving forward.
The team has still not informed its users when the MRGN token will be launched.
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