NOIDA (CoinChapter.com)—Recent events within the Solana ecosystem involving DeFi platforms MarginFi, Solend, and others could add to the bearish cues against the SOL token. The ruckus among Solana lending projects could negatively impact SOL when the token has formed a bearish pattern.
The Solana blockchain faced internal disputes and operational challenges within key DeFi platforms. MarginFi, SolBlaze, and Solend became entangled in a dispute involving accusations of misconduct and misinformation.
If users ditch projects based on the SOL token’s parent blockchain, the dispute could lead to bearish cues for the token.
The Rift Between Lending Protocols
The conflict ignited over MarginFi’s alleged failure to replenish BLZE token emissions, attributed to blockchain congestion. MarginFi’s co-founder, MacBrennan, contested claims of non-payment and criticized the timing of media inquiries as unjust.
MarginFi, a lending protocol on Solana, saw the resignation of its CEO, Edgar Pavlovsky, which triggered a substantial outflow of funds—nearly $200 million.
In response to MarginFi’s instability, competing platforms such as Solend and Kamino capitalized on the situation.
Solend’s pseudonymous founder, 0xRooter, took to X to show how deposits had increased during the last 24 hours. The Solend founder had accused MarginFi of undermining Solend by spreading false information about its operations and financial health.
After criticizing rival MarginFi, Solend reported receiving $17 million in deposits within 24 hours, marking its largest single-day increase since July 2022.
The shift was partly driven by an incentive in the form of a token airdrop to users transferring their funds from MarginFi to Solend, indicating a strategic move to attract liquidity and stabilize their standing within the Solana-based lending ecosystem.
Furthermore, MarginFi’s founder’s resignation amidst all the controversy added to the confusion. However, the company assured that its operations would continue unaffected.
Meanwhile, SolBlaze announced that MarginFi was addressing an 8-day interruption in BLZE emissions caused by its engineering issues and plans to reimburse affected users. Investigations into further missing emissions reports continue.
MarginFi also revealed that its rewards system had unintentionally extended emission periods by over-allocating BLZE. Future emissions are on hold pending SolBlaze DAO’s review, which might restore them if MarginFi effectively resolves the problems.
SOL Price Moving Inside Bearish Pattern
Both MarginFi and Solend pledged to improve communication to tackle such issues swiftly in the future. The hullabaloo could adversely impact SOL price action, forcing the token to SOL price to likely confirm a bearish technical setup called the ‘descending triangle pattern.’
The descending triangle is a bearish continuation setup with a falling resistance line that caps upside attempts and a flat support that prevents declines. The height of the triangle’s thickest section determines the price target in a descending triangle setup.
If the triangle pattern pans out, the SOL coin price could drop nearly 23% to reach the projected price target near $129.
Hence, the great lending protocol face-off between MarginFi and Solnd could negatively impact SOL price action, which in turn could result in the token confirming the bearish pattern.
