Solana continues to be on the news, this time due to some projects based on the chain having a dispute. Solana-based lending and borrowing protocol MarginFi has recently been “beefing” with Solend, another lending protocol, and SolBlaze, a liquid staking platform.
Amid the drama, MarginFi’s CEO and founder stepped down after some “inappropriate” X posts and massive criticism. The project now faces significant outflows and a lack of trust from the Solana community.
Solana’s Projects Fight Each Other
Yesterday, SolBlaze claimed that MarginFi had failed to replenish the BLZE tokens into their rewards system for users to claim for the past three weeks. Moreover, the staking platform implied that the MarginFi team refused to respond to their attempts to reach out and clarify the situation.
MacBrennan, the co-founder of the MRGN group, considered the project “the target of a very unfortunate hit piece.” In an X post, the MarginFi contributor “clarified the misinformation.”
We were the target of a very unfortunate hit piece today.
I’ll clarify the misinformation you’re seeing:
1) This tweet is completely wrong
marginfi has failed to replenish BLZE over the last 3 days, not three weeks. Yes, this is because of chain congestion and prioritizing… pic.twitter.com/c8OhZqBYza
— macbrennan (hiring) ◼️ (@mrgnalt) April 10, 2024
Per the post, the replenishing issues had occurred over the last eight days instead of three weeks. The problems were caused by the Solana network congestion and “prioritizing user safety.”
Additionally, MacBrennan refuted the claims that MarginFi’s team declined to respond. According to the post, the SolBlaze team reached out to them at 4:46 am on the same day SolBlaze posted the “exposé.”
MarginFi users were quick to respond to MacBrennan’s post, criticizing the project for not being truthful. The protocol users legitimized SolBlaze’s claims by stating they had not received BLZE tokens long before the network congestion started.
Adding fuel to the fire, the Solend protocol team posted on their official X account that the project will airdrop to the users who withdraw from MarginFi and deposit into their protocol.
Rooter, Solend’s founder, explained why they joined in, affirming that his project was “on the receiving end of multiple attacks” during the bear market.
The alleged attacks from the MarginFi team included “attempting to blackball Solend with peers,” bad-mouthing and criticizing the project, and “attacking Solend’s oracle configuration.”
Rooter claimed that healthy competition is well-received, but that isn’t what occurs with MarginFi. Solend’s founder concluded: “MarginFi rubs many teams the wrong way with their misconduct.”
Solana's market cap is at $76.14 billion. Source: Market Cap SOL on Tradingview
MarginFi CEO Quits, Claims Differences With The Team
Amid the drama, MarginFi’s founder and CEO, Edgar Pavlovsky, made a series of responses to the criticism that were not well received. Pavlovsky stated in one of his responses, “Take your money out, go fuck yourself,” later calling the user an “irrelevant, slandering piece of shit.”
The reply spree continued throughout Wednesday afternoon, resulting in the later resignation from his position in all MRGN arms. The former CEO claimed he doesn’t “agree with how 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
The lending protocol confirmed Pavlovsky’s resignation, stating that “his departure is a function of internal operational disagreements and his reasons.” Additionally, they reassured users that all projects remained fully operational and unaffected by the founder’s departure.
The announcement also received criticism, with MarginFi users expressing concern about the lack of a timeline regarding the token airdrop. It appears the incident has made many reconsider continuing to use the protocol.
As a result, the total value locked (TVL) dropped from $910 million to $660 million. According to Dune data, the massive outflows account for $250 million in the past 48 hours.
MArginFi outflows reach $250 million in the last 48 hours. source: Dune
Notably, the Solend Protocol has seen a significant rise in new users amid the drama. The rivaling platform quadrupled its new users in the past 24 hours, going from 245 on Wednesday to 1178 new users today.
Featured Image from Unsplash.com, Chart from TradingView.com
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