Users withdrew more than $175 million from the MarginFi protocol in one day

MarginFi's total value locked (TVL) has dropped by almost 30% and now stands at $510 million. In early April, the figure reached $811 million.

The reason for the downward dynamics of the MarginFi protocol is the resignation of the site’s CEO. Edgar Pavlovsky announced about leaving on his page on X (formerly Twitter).

How MarginFi users reacted to the resignation of the CEO

The sudden departure caused panic among users of the Solana-based MarginFi (SOL) protocol. According to Dunein less than a day they withdrew about $175 million from the protocol. As a result, the TVL of the project fell from $687 million to $510 million in a day, according to DefiLlama.

“I didn’t agree with the way everything was done inside and out. Lawyers are still sorting it out, but I have already told everyone concerned that I don’t care about tokens, money, or anything else,” Pavlovsky wrote.

The founder of MarginFi added that the resignation is, first of all, his failure as the founder of MRGN Inc, the company behind the decentralized finance (DeFi) project.

TVL of the MarginFi protocol as of April 11. Source: DefiLlama

The rest of the protocol team confirmed Pavlovsky's departure. The developers assured the community that the incident would not have any impact on the site’s products or operations. However, the damage to reputation and user trust has already been done.

“All products remain fully functional and unaffected by his care. The point of DeFi is that the main participants can leave the project, and the protocol will continue to work. The resignation is due to internal disagreements at work and personal reasons for Pavlovsky, and we respect his privacy,” MarginFi representatives wrote.

Competitors take advantage of MarginFi's difficulties

The platform's problems are not only related to the resignation of the founder of MarginFi. Previously, the project introduced a new loyalty program, which caused a mixed reaction from users.

In addition, on the eve of another liquid staking protocol on Solana – SolBlaze – criticized on MarginFi for failure to fulfill obligations to pay out tokens. According to the developers, the MarginFi team did not distribute the assets allocated to users in accordance with SolBlaze's rules for rewarding stakers. As a result, the sites suspended cooperation.

However, after Pavlovsky’s resignation at SolBlaze stated, that they spoke with the MarginFi team and resolved the problem. The platform admitted that it had indeed not distributed the emissions for eight days and promised to return all the money to users.

The difficulties of MarginFi took advantage Another project is Solend, which decided to quickly attract users who were disappointed with the platform. The DeFi protocol announced incentives for those who transfer their funds to Solend, which only increased the outflow of funds from Pavlovsky’s platform.

A real war has broken out on the Solana network

The wider Solana network is also experiencing turmoil. Duo Nine analyst spoke about the hidden battle and schemes used by blockchain participants.

According to the expert, large ecosystem players are launching DDoS attacks against each other, trying to get priority to add their operations to Solana. As a result, users who are targeted by competitors cannot conduct transactions normally.

It was previously revealed that 57.41% of transfers on the blockchain remain unfinished. Against this background, the developers are going to introduce a new mechanism into the network that will speed up transaction processing.


Source: Cryptocurrency

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