- Leadership problems at MarginFi have benefited other DeFi platforms which have registered an uptick in deposits and users
- MarginFi’s CEO resigned after disagreeing with his team
- His resignation led to massive withdrawals and caused the protocol’s token to plummet in value
Disagreements within MarginFi’s top leadership have been a blessing in disguise to other DeFi platforms on the Solana blockchain. Among the biggest beneficiaries have been Solend and Kamino whose deposits rose by over $15 million and $80 million respectively, a rise that coincided with the leadership wrangles at MarginFi. The protocol’s CEO Edgar Pavlovsky abruptly resigned leading to users withdrawing over $200 million since then, something that may continue if the platform fails to restore user confidence.
Running Pretty Red
Disclosing his resignation on X, Pavlovsky said that he disagreed “with the way things have been done internally or externally” but maintained that MarginFi has “a world-class team.” Pavlovsky hinted at financial reasons noting that he has “been running pretty red financially.”
I resigned from mrgn today. From working on marginfi, from the research arm, from it all.
It’s a world class team — it really is — but I don’t agree with the way things have been done internally or externally. I’ve said it many times and I’ll say it again, but those of us who…
— edgar ◼️ (@edgarpavlovsky) April 10, 2024
His departure caused speculations within the community leading to the protocol’s total value locked (TVL) to shrink by about $200 million in about two days.
The withdrawn funds landed on its rivals who have been recording an uptick in deposits and token value. Solend’s token, for example, increased by over 35% while its deposits rose by over 10%. Drift, another Solana-based DeFi protocol, saw its deposits increase by over $3 million.
Enticing Users to Leave MarginFi
Some DeFi platforms like Solend, however, mounted a campaign to attract MarginFi users. The protocol even offered free tokens as a welcome gift to those ready to shift to Solend.
Despite the disagreements and controversy surrounding his exit, Pavlovsky has maintained that MarginFi is the “safest place,” adding that “deposits are coming back.”
There was a 30% drawdown from @marginfi over the last 24 hours – that’s >$250M
Deposits are coming back in, but you know what’s even more important?
Bad debt: $487 (0.02% of rough yearly revenue, very good)
This is what a resilient, decentralized protocol looks like. This is…
— edgar ◼️ (@edgarpavlovsky) April 11, 2024
With Pavlovsky’s departure and the likes of Solend enticing users to leave the platform, it’s to be seen how long it’ll take to recover the $200 million already withdrawn.
