$130 Million Withdrawn From Marginfi as CEO Departs

Solana-based decentralized lending protocol Marginfi has seen an exodus of funds after the sudden departure of its founder and CEO Edgar Pavlovsky, while rival Solend promising to airdrop funds to users who shift funds over to their lending protocol. 

In an X post on Wednesday, Pavlovsky said he would be stepping away from his role, saying that he doesn’t agree with “the way things are done internally and 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

Marginfi also confirmed Pavlovsky’s exit in an X post shortly after, calling his departure a function of internal operational disagreements and his own personal reasons. 

Solend, another decentralised Solana-based lending protocol that has been competing with Marginfi for market share, announced that they would reward users who withdraw funds from Marginfi and deposit with Solend via an airdrop proportional to the dollar value migrated over. 

at $109 Million now

source: https://t.co/W4aeGVQ4j8 pic.twitter.com/SXrLWEmHVQ

— Chris (@oyacaro) April 11, 2024

Data shows that more than $130 million has been withdrawn from Marginfi over the last day. However, the protocol’s troubles started earlier in the week, with Pavlovsky at the centre of controversy. 

Solana staking pool SolBlaze called out Marginfi for not dropping BLZE rewards tokens to users and instead selling almost all the airdrop tokens sent over the past few weeks that were intended for governance and other purposes.

“PSA: If you want Marginfi to support a protocol you’re working on, do not send tokens to the treasury asking ‘in good faith’ for a delta neutral treasury to hold them. Marginfi’s treasury intends to hold no delta for the foreseeable future,” said Pavlovsky in an X post responding to the accusations, which has since been deleted.

In the hours leading up to his resignation, Pavlovsky also made several posts on social media antagonizing users and members of other protocols, and amongst other things threatened to do what he can internally to block any potential token airdrop.

Although SolBlaze has suspended emissions allocations for Marginfi, the protocol’s team appears to have reconciled with the Marginfi team after Pavlovsky’s departure.

If marginfi is willing to make amends with the SolBlaze community and acts in good faith going forward, the SolBlaze DAO may vote to reinstate marginfi’s emissions and these will be more closely monitored to more quickly prevent future issues.

— 🔥🪂 SolBlaze.org | Stake with us! (@solblaze_org) April 11, 2024

“Happy to work with the Solblaze team to resolve some of the comments and confusion from earlier. Marginfi was one of the first Solblaze integrations and plans to continue supporting these efforts going forward,” said the Marginfi team on X.