Solend founder says SBF wants to ‘profit at all costs’ Solend founder says SBF wants to ‘profit at all costs’
Several community members have accused the crypto billionaire and his firms of not having the community's best interest in mind.
2 min read
Updated: Oct. 25, 2022 at 5:46 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Solend (SLND) founder 0xrooter has described FTX founder Sam Bankman-Fried as a “profit maxi” who wants to “profit at all costs.”
SBF is a profit maxi: profit at all costs
— 🙏🚫 Rooter (hiring!) (@0xrooter) October 24, 2022
According to Rooter, a company’s action reflects its founder’s personality. While he has never had any personal interaction with SBF, he believes his experience with one of the companies owned by the crypto billionaire gives him an idea of what to expect.
Solend founder describes Alameda’s ‘perplexing behavior’ during IDO
Rooter stated his experience with Bankman-Fried-owned Alameda Research during the initial dex offering (IDO) for Solend.
According to him, Alameda had participated in Solend’s seed round –an action he had interpreted meant they wanted to support the Solana-based lending protocol. However, the trading firm carried out a series of “perplexing behavior” to stunt the growth of the protocol.
Rooter continued that on the cusp of Solend’s initial dex offering (IDO), he realized that over $100 million had been raised by the protocol, which made its fully diluted value (FDV) almost the same as storied DeFi protocol Aave.
rewind to solend's IDO in nov 2021. after a sleepless night, the IDO site was launched. I stepped away to catch up on sleep, and upon waking up learned that >$100M was contributed to the IDO. the implied FDV was inflated to >$2.5B, undeservedly rivalling aave at the time.
— 🙏🚫 Rooter (hiring!) (@0xrooter) October 24, 2022
But Solend used a mango-style IDO which allowed users to deposit or withdraw on the first day and then only withdraw on the second. On the second day, just a few minutes before the IDO ended, $80 million was pulled out of the protocol, which meant it raised only $26 million.
The Solend founder stated that on-chain data revealed that Alameda Research controlled the two accounts that initially deposited $40 million each and removed $80 million at the last minute.
Alameda’s move effectively meant it got a better price for the tokens since the initially high FDV would have scared other investors from investing in the protocol. Rooter continued that these actions “make sense if you remember that Alameda is a profit maxi hedge fund (just larping as VC because it’s lucrative).”
Rooter said:
“Alameda’s actions reflect SBF’s ideology. profit absolves all sins. the ends justify the means. effective altruism.”
Crypto community becomes critical of SBF
Meanwhile, the Solend founder is the latest crypto community member to become critical of Sam Bankman-Fried. Several community members have accused the crypto billionaire and his firms of not keeping the community’s best interests in mind.
SBF recently wrote his thoughts on crypto regulations, which many criticized severely.
Ryan Sean Adams said the recommendations “absolutely suck” as it proposes DeFi to become OFAC-compliant, among other issues.
Sam.
With respect.
This absolutely sucks.
You're saying DeFi should be OFACed.
You're saying onchain freeze's should be normal.
You're saying DeFi front-ends to register as a broker-dealer.
No, this is not reasonable.
This would eliminate the U.S. from the crypto race. pic.twitter.com/AtlvHgaAkL
— RYAN SΞAN ADAMS 🤓 (@RyanSAdams) October 19, 2022
Some believe SBF is only trying to maintain the competitive advantage of FTX and centralized exchanges while making it impossible for others to compete.
Founder of ShapeShift Erik Voorhees also published a full response to the policy where he countered several points, especially calls for crypto to be OFAC compliant.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
In this article
Solana is a high-performance blockchain platform that utilizes a unique consensus algorithm called “Proof of History” to achieve fast transaction speeds and low fees.
Solend
$1.09209
Solend is the autonomous interest rate machine for lending on Solana..
Alameda Research
Alameda Research was once a principal trading firm, operating as an arm of the failed crypto exchange, FTX.
Sam Bankman-Fried is the former CEO, and co-founder of defunct crypto exchange FTX and Alameda Research.