Solana borrowing and lending platform MarginFi sees massive withdrawal after CEO resignation
- MarginFi CEO Edgar Pavlovsky resigns following accusations from Solana staking protocol SolBlaze.
- Over $260 million has been withdrawn from MarginFi and reshuffled to other Solana platforms.
- MarginFi clarified issues with SolBlaze and assured users of its protocol's resilience.
In the last two days, MarginFi has seen more than $260 million leave its platform into other competing Solana platforms on Thursday. This comes after it was hit with a controversial accusation from staking protocol SolBlaze (BLZE) and the news of its CEO Edgar Pavlovsky resigning. However, after clarifying with SolBlaze and recent reassurance from Pavlovsky, the protocol has calmed users' nerves.
Read more: Solana scrambles to patch failed transactions on its chain, crushed under rising user activity
MarginFi sees nearly 31% decline in TVL
MarginFi was on the receiving end of a hot accusation posted by SolBlaze in their X handle on Wednesday. They accused MarginFi of pocketing three weeks' worth of BLZE emissions meant for users by refusing to distribute it to users. Additionally, they said MarginFi further acted in bad faith by dumping hundreds of millions of BLZE tokens meant for protocol governance.
As the post made the rounds on X, more woes hit MarginFi as its co-founder and CEO Edgar Pavlovsky announced his resignation in an X post on Wednesday. He said, "It's a world-class team -- it really is -- but I don't agree with the way things have been done internally or externally."
Also read: Solana meme coins see steep correction as bull market enthusiasm fizzles out
Following the double hit, users panicked, withdrawing more than $260 million from MarginFi. Users quickly shuffled those coins into competing platforms within the Solana ecosystem.
To lure in users to its platform, lending protocol Solend (SLND) quickly promised an airdrop to as many that moved friends from MarginFi to its protocol. As a result, deposits on the platform jumped nearly 12% in the past 24 hours. Its native SLND token increased by 44% before experiencing a correction. Other lending platforms like Kamino and Drift.
However, a recent move by one of its co-founders shows SolBlaze made a mistake on how long MarginFi has yet to distribute emissions - eight days instead of three weeks.
Happy to work with the Solblaze team to resolve some of the comments and confusion from earlier
— marginfi ◼️ (@marginfi) April 11, 2024
marginfi was one of the first Solblaze integrations and plans to continue supporting these efforts going forward
Users will be refunded for the period when emissions were not active… https://t.co/v2YR2mo62b
It said this was because of the recent congestion the Solana blockchain experienced. MarginFi staff and the resigned CEO have also praised the resilience of the protocol despite the withdrawal exodus it faced
Author
Michael Ebiekutan
FXStreet
With a deep passion for web3 technology, he's collaborated with industry-leading brands like Mara, ITAK, and FXStreet in delivering groundbreaking reports on web3's transformative potential across diverse sectors. In addi
