[1] https://realms.today/dao/7sf3tcWm58vhtkJMwuw2P3T6UBX7UE5VKxP...
Three Arrows Capital?
If they don't believe in the depth of the SOL/USD(C|T) books this could just be a way to sell SOL or go short SOL.
This whale is probably just happy to default on the loan and get liquidated at this point.
It's too bold to assume this. This whale is probably so angry right now because they ruined his/her plan causing him/her million of dollars. 1) Find an opportunity to drive the price of SOL down due stupid DeFi design lacking 101 Economy knowledge. 2) Go short on SOL 3) Use the opportunity to cause a slippage of 46% in price which further triggers chain liquidation which causes the price even to go further down and most likely cause Solend to shut down creating more and more panic sell. 4) Make crazy profit.
Solend to call themselves "decentralized" now is just a joke.
People don’t really make crazy profits by following the herd, they see something everyone else misses and bet big.
The position of the whale, under the parent’s plan, is a clumsier version of what I described because it leaves an unknown lag before the SOL gets dumped.
> Unless they had a plan that only worked by doing it the way they did it.
I don’t know many short gambles that actually take a long, and which deliberately introduce uncertainty in when an asset is dumped on the market. And if this is your best defense of its merits (“maybe this is the only way it would work”), you’re offering nothing but unbacked speculation (that mistakenly read me as suggesting they “follow the herd”, no less).
"a whale has deposited 5.7M SOL ($170M and borrowed 108M USDC and USDT borrowed)"
So they put in 5.7 SOL at some price, and used it to borrow stablecoins? If their position is liquidated how does that play out? If he traded coin for coin how do they get the traded assets back?
Ideally they over collateralize. So if SOL is 100 USDT, he puts in 5 SOL and gets 50 USDT per SOL (250 USDT). If SOL approaches 50 USDT, (say 51 USDT) they sell the SOL he gave them and keep the proceeds (they have 255 USDT and are ahead by 5 USDT). The loan has reached an end condition.
Another thing that could happen is he does something with the 250 USDT loaned to him and he gets 300 USDT. He gives back the 250 USDT and gets back his 5 SOL and now has 5 SOL and 50 USDT (minus some small interest or fee). This is another end condition.
All works on the small scale. But presumably you can think of exploits on the large scale.
A simple one is that the loan is so large in that they can't liquidate without slippage (price moving as they sell causing them to gain less than they anticipated). In this case, they might want to exit a little earlier.
Understandable but absurd given the systematic risk.