By
Temitope Olatunji
April 29th, 2024
The recent congestion events on the Solana blockchain has led to an infighting among different DeFi protocols leading to a major exodus of funds from Marginfi.
Solana-based crypto lending protocol Marginfi is undergoing some major turbulence with its creator Edgar Pavlovsky announcing his departure from the project on Wednesday, April 10, citing some internal disagreements. As a result, the outflows from Marginfi have skyrocketed to more than $214 million from one of the most popular DeFi protocols on Solana.
On the other hand, the total value locked on Marginfi has dropped to $514 million, in comparison to $734 million earlier this week and $811 million on April 1. In a strong-worded message on the X platform, Pavlovsky wrote:
“The lawyers are still working things out but I’ve told everyone involved I don’t really care about tokens, or money, or any of that. Let that be a clear statement of my intention here and of my principles. I’ve been running pretty red financially lately so this puts me pretty much back at $0, but if you’ve been in this industry for a while you know that’s nothing new.”
MarginFi also verified Pavlovsky’s departure, assuring that its products and operations remain unaffected. “His departure is a function of internal operational disagreements and of his own personal reasons, and we respect his privacy,” noted Marginfi.
The infighting has emerged against the backdrop of the recent Solana network congestion and the public arguments blaming other parties. While developers have been rallying to bring a solution to this, it has turned more into a blame game.
SolBlaze Accused Marginfi of Acting in Bad Faith
Solana’s liquid staking protocol SolBlaze has accused Marginfi of acting in bad faith by failing to distribute tokens to users as per SolBlaze’s depositor reward guidelines. SolBlaze incentivizes BlazeStake Solana or Blaze token holders and depositors by rewarding them with tokens referred to as “emissions”, a benefit also extended to depositors on Marginfi.
Additionally, SolBlaze has accused Marginfi of dumping the airdropped tokens from solBlaze, that were initially meant for governance participation. Following Pavlovsky’s resignation, SolBlaze communicated that it had addressed and resolved issues with the Marginfi team. SolBlaze further stated that Marginfi acknowledged its failure to distribute emissions allocations for eight days. In response, Marginfi committed to refunding users for the missed allocations.
On the other hand, Marginfi competitor Solend is seeking an opportunity to attract users after the recent outflows. Solend is offering airdrops to those who will transfer their funds to the platform, proportional to the migrated value.