Solana’s $1 Million Liquidation Threatens Price: Details
A Solana A long contract worth $2.5 million about to be liquidated came under scrutiny after a six-hour network outage on October 1. The Solana network stopped processing transactions at some point, leaving users stranded.
Colin Wu reports, “Solana has been down for nearly 5h, and validators are currently coordinating a restart attempt. There is a long contract with nearly 2.5 million in the mango market that is being liquidated. holder cannot add margin or liquidate.”
For those who don’t see the position: pic.twitter.com/7KujMP2vqc
— Kaash Capital ❁ (@XOKaash) October 1, 2022
The estimated liquidation price of the contract was $33.04. However, with the price of SOL below this point, the position was dangerously close to being liquidated. A crypto user named Kaash Capital, who posted the screenshot of the long position, also noted that bids were filled up to $32.5, which could put “a lot of selling pressure” on the SOL price. He also shared a screenshot showing that 163 liquidations had taken place. At press time, Solana was trading at $32.93, down 2.63% in the past 24 hours.
Solana caught the eye in June, when she found herself entangled in what most described as her biggest whale liquidation crisis. A large account holder, or “whale,” had a loan with an outstanding balance of $108 million in USDC and USDT that was collateralized by SOL, the native token of the Solana network. As the price of SOL crashed, the loan was in danger of being liquidated.
Solend, a Solana loan procedure, would have had virtually no SOL had the price of SOL continued to fall and the $21 million of SOL used as collateral for the loan had been liquidated. The co-founder of the project argued that the rush to acquire so much SOL for a discount may have caused the crash of the $2.6 billion Solana network.
Ultimately, the whale began shifting its Solend investments to other Solana DeFi subsidiaries like Mango Markets – solving the most acute crisis without a single cascading liquidation.
The Solana blockchain has restarted
Update: The Solana network has been successfully restarted. Network operators and dapps will continue to come back online over the next few hours.
— Ghost (@ghost) October 1, 2022
The Solana Network was successfully restarted after a six-hour outage. The Solana network stopped processing transactions and went offline on Friday due to a misconfigured node.
This is the blockchain’s fourth major outage since January, when it experienced a succession of partial outages for most of that month. This most recent network shutdown comes a year after a nearly 18-hour outage last September.