🍬 The Good, The Bad, and The Ugly

GM and welcome to SOL Sweet. Holy sh*t what a week it's been for Solana. Check this out:

🤯 Sunday - Solend has a brain explosion🎒 Monday - xNFTs are announced😴 Tuesday - Rest day🦄 Wednesday - Magic Eden becomes a unicorn 📱 Thursday - Solana launches a mobile phone🍬 Friday - SOL Sweet hits inboxes

Buckle up baby! We're gonna cover all that and more in the next 3 minutes and 58 seconds 👇

Solend, what were you thinking?

Solana lending platform Solend did something crazy this week.

They passed a vote to take emergency control of a whale's account, to avoid a massive liquidation event happening on chain.

Yes, you read that right. They tried to centralize DeFi.

Let's step through how they got to that decision, and what's happened since.

A whale deposited 5.7M SOL or ~$170M on Solend. The platform claims that was >95% of the pools’ deposits.

The whale then used their SOL as collateral to borrow $108M in Stablecoins.

If SOL hit $22.30 they would be liquidated for 20% ~$21M.

Solend were concerned this liquidation happening on chain could cause massive congestion and crash Solana again.

They feared it could cause the price of SOL to drop further, triggering more liquidations across other DEXs on Solana.

Solend said they had tried to contact the whale to get them to reduce their risk, but they didn’t get a response.

Now hold on, sh*t's about to get crazy.

Instead of letting things ride, they issue a governance proposal to take control of the whales account and execute the liquidation OTC (over the counter).

This would have a smaller impact on the price of SOL by avoiding dumping $20M of the token in one go. Happens all the time in traditional finance, I'm told.

Solend put the proposal to a DAO vote. Specifically asking members whether they should:

The vote passes 98% yes. But, one whale held a majority of the voting power. By the way, not the same whale that caused this mess.

Essentially one yes vote decided the outcome.

On top of that, the voting window was only open for 6 hours and the site was down for 3 hours during that window.

Naturally there’s backlash, a lot of backlash!

Then, Solend issues a second governance proposal to undo the first proposal revoking their power to take over the whales account. They give the vote 24 hours this time.

It passes with 99.8% voting yes. No surprises there.

Since then, the price of SOL has actually increased. This bought the whale and Solend more time.

The team released a third governance proposal, which passed, to reduce the borrow limit to $50M and temporarily reduce the max liquidation factor from 20% to 1%.

And maybe the best news of all - the whale has been in contact with Solend and started moving funds and reducing their position.

Wow, that was a lot to take in.

It's easy to criticize from the outside, but in the end this was a bad move. Solend put themselves in an uncomfortable position and wanted to resort to traditional methods to undo it. That's not DeFi.

The team has announced they're in the clear for now and will be releasing a full post mortem soon.

We can only hope lessons have been learnt.

What are xNFTs?

Let's play charades:

• 1 word

• 4 letters

• sounds like KFC

You guess it?

xNFT is the word.

Wait, what? WTF is an xNFT?

The X stands for eXecutable. Here's the official announcement.

Essentially, Coral is turning your wallet into a "backpack."

Backpack is the operating system, xNFTs are the apps. Rather than connecting your wallet to different protocols, those protocols connect to the operating system.

According to the announcement, xNFTs will eventually be cross-chain.

But is this closer to web2 than we think. If you have to build an OS, is that centralized?

Well no, because protocols are still built on chain and xNFTs interact with them on chain.

To be honest, we're still trying to wrap our head around this. We thought we understood, but it's hard to explain without seeing it in action.

Hopefully we'll see more details on xNFTs in the next few weeks.

Magic Eden is now a unicorn

Solana's leading NFT marketplace just raised a $130M Series B, valuing them at $1.6B!

That's unicorn status!

And it's all happened in just 9 months since they launched.

When OpenSea announced Solana NFTs were coming to their marketplace, most thought it would be the end of Magic Eden. Myself included.

Instead, they've continued to grow and ride the breakout of Solana NFTs.

Like partnering with Phantom to allow users to list their NFT's directly in wallet.

They hosted a party on a yacht as part of NFT NYC and it looked lit! Do we still say lit?

Whatever these guys do, it feels like they can't miss.

And check out this crazy story from one of the founders. From broke on a boat, to unicorn on a yacht. F*cking wild!

Solana goes all in on mobile

In the last week, SMS started appearing around Solana twitter.

Like xNFTs, everyone was adding SMS to their twitter names and guessing what it could mean.

Thankfully we didn't have to wait long, with the announcement coming yesterday.

SMS = Solana Mobile Stack

It's a toolkit for building web3 apps on mobile.

And if that wasn't big enough, Solana is also launching their own smartphone called Saga.

It's built on top of Android with a Solana dApp store.

This is massive news and a huge bet from Anatoly and everyone at Solana. But if you step back it makes a lot of sense.

Mobile has become the dominant platform of everyday life for web2. But web3 hasn't embraced mobile yet.

Do we really think mass adoption will come by expecting everyone to revert back to desktop?

They say a bear market is the time for building. Solana has grabbed the bear by the balls and is building like crazy.

Maybe it is Solana Summer after all.

Extra sweets

Coinbase now supports on chain transactions for Solana.

Check out this report on Solana. And the Galaxy Brains podcast where they talked about the report and Solana from the 35 minute mark. It's important to note the report and pod was released early June so there's a bit of FUD about the network crashes to get through.

StepN drops hints of a BAYC colab.

Lab Eleven has launched as a Solana focused web3 incubator.

Solana's latest release is getting attention.

Tweet of the week

😂

What a week. We wish every week was this action packed. How are you feeling about Solana? Hit reply and let us know.

And please forward this to a friend who should be keeping up with Solana. It'll take 10 seconds. Writing it takes us 10 hours. Thanks!

- Toby (@TenderKiwi)