Overview
Solend launched in 2021 as one of the first lending and borrowing protocols on Solana, providing a familiar Aave/Compound-style pool-based lending experience adapted for Solana's high-throughput environment. At its peak, Solend was the dominant lending protocol on Solana with over $1B in TVL.
However, Solend is most widely known for the "whale incident" of June 2022. A single wallet held an enormous SOL collateral position (~$170M) that risked cascading liquidations on-chain if SOL's price dropped further during the broader market crash. The Solend team proposed — and briefly passed — an emergency governance vote (SLND1) to grant the protocol special powers to liquidate the whale's position via OTC to avoid on-chain liquidation chaos. The vote passed with a single whale voter holding majority governance power, and the proposal was ultimately reversed after massive community backlash.
This incident became one of the most debated events in DeFi history, raising fundamental questions about the limits of governance power, protocol neutrality, and the right to seize user funds. Solend has since lost significant market share to Kamino, Marginfi, and other Solana lending alternatives.
Smart Contracts
Architecture
Solend is built on Solana's SPL Token Lending program with custom modifications. The architecture uses a pool-based model with isolated lending pools (main pool plus permissionless pools). Each pool operates with its own risk parameters and asset listings. The design is relatively straightforward compared to newer Solana lending protocols.
Code Quality
The codebase is open source and based on the Solana SPL Token Lending reference implementation. Solend was audited by Kudelski Security and other firms. As one of the earlier Solana DeFi protocols, the codebase reflects the state of Solana development tooling at launch rather than current best practices.
Upgradeability
Solend's programs are upgradeable with team-controlled authority. This upgrade power was central to the whale controversy — the proposed intervention would have required program-level changes to override a user's position. The team retains operational control over protocol parameters and upgrades.
Security
Audit History
Solend has been audited by Kudelski Security and undergone additional reviews. However, the audit coverage is less extensive than top-tier protocols. The protocol experienced an oracle manipulation exploit in November 2022 that resulted in over $1M in bad debt from a manipulated USDH market — an incident that further eroded confidence.
Oracle Design
Solend uses Pyth Network and Switchboard oracles. The November 2022 oracle exploit involved manipulation of a less-liquid asset's price feed to extract value from the protocol. Post-exploit, Solend tightened oracle parameters and reduced exposure to illiquid assets, but the incident highlighted oracle vulnerability in smaller markets.
Liquidation Engine
Solend uses standard liquidation mechanics where external bots liquidate undercollateralized positions for a bonus. The whale incident demonstrated that standard liquidation at extreme scale could overwhelm on-chain liquidity and cause cascading effects — a real risk that the protocol tried to address through the controversial governance intervention.
Track Record
Solend's track record includes the whale governance crisis (June 2022), an oracle manipulation exploit (November 2022), and gradual market share loss. While the protocol has continued operating, the combination of governance overreach and a direct exploit significantly damaged its reputation.
Risk Management
Asset Listing
Solend supports multiple isolated pools — a main pool with curated blue-chip assets and permissionless pools that anyone can create with custom asset listings. The permissionless pool design allows experimentation but also exposure to exotic and illiquid assets with oracle manipulation risk.
Risk Parameters
Each pool has configurable LTV ratios, liquidation thresholds, borrow limits, and reserve factors. The main pool uses conservative parameters for major assets (SOL, USDC, ETH). Permissionless pools can have aggressive parameters set by pool creators, placing risk management burden on users.
Concentration Risk
The whale incident exposed Solend's inadequate handling of concentration risk — a single position representing a massive share of total borrows. Post-crisis, Solend implemented deposit and borrow caps, but the damage to governance credibility was done. The protocol's risk management is now more conservative but reactive rather than proactive.
Adoption
TVL & Usage
Solend's TVL has declined from its peak of over $1B to approximately $200-400M as of early 2026. The protocol has lost significant market share to Kamino Finance and Marginfi, which offer more sophisticated features and carry less reputational baggage. Solend remains a functional lending market but is no longer the Solana lending leader.
Ecosystem Position
Solend is still integrated across Solana DeFi but is increasingly viewed as a legacy protocol. Newer users tend to gravitate toward Kamino or Marginfi. Solend's pools still serve a role for users who established positions early and for assets available in its permissionless pools.
Market Share Erosion
The combination of the governance controversy, the oracle exploit, and stronger competition has steadily eroded Solend's position. The protocol went from Solana lending dominance to third or fourth place, a cautionary tale about the long-term cost of governance missteps.
Tokenomics
Token Overview
SLND is the governance token with a total supply of 100 million. The token was central to the whale controversy — the emergency governance vote that attempted to seize user funds was conducted via SLND voting. Token distribution includes team, investors, treasury, and community mining rewards.
Revenue Model
Solend earns revenue through reserve factors on borrowing interest. Revenue has declined proportionally with TVL. The protocol's ability to generate sustainable revenue depends on reversing the adoption decline.
Governance
SLND governance was severely damaged by the whale incident. The emergency vote passed with a single large holder controlling the outcome, was reversed under pressure, and exposed the governance system's vulnerability to plutocratic control. The episode demonstrated that on-chain governance power without proper safeguards can threaten user property rights.
Risk Factors
- Governance Trust Deficit: The attempted seizure of a user's collateral through emergency governance remains the defining event. This precedent makes users question whether their funds are truly under their own control on Solend.
- Oracle Vulnerability: The November 2022 oracle exploit demonstrated real-world vulnerabilities in permissionless pool oracle configurations.
- Declining Relevance: Steady market share loss to Kamino and Marginfi suggests the protocol may struggle to maintain developer attention and security infrastructure.
- Solana Network Risk: Standard Solana risks including network outages and performance issues that can prevent timely liquidations.
- Smart Contract Maturity: Based on early Solana SPL Token Lending code, the architecture is less sophisticated than newer competitors.
- Team Centralization: The team's willingness to propose overriding user positions through governance reveals a mindset that may not align with DeFi's credible neutrality principles.
Conclusion
Solend holds a unique and cautionary position in DeFi history. As a Solana lending pioneer, it demonstrated the viability of lending protocols on high-throughput chains. But the June 2022 whale incident — where governance was weaponized to attempt seizing a user's collateral — inflicted lasting damage that transcends any technical improvement.
The protocol still functions and serves users, but its market share has eroded significantly as competitors like Kamino and Marginfi offer better products without the governance baggage. The oracle exploit added insult to injury, creating a two-front credibility problem (governance risk and security risk).
Solend scores below average for a lending protocol, not primarily due to its current technical capabilities, but because the governance precedent it set fundamentally undermines user trust. In DeFi, where credible neutrality is paramount, the attempted seizure of user funds — regardless of the practical justification — is a red line.