MarginFi’s TVL Drops by $160 Million Following Founder’s Departure

Edgar Pavlovsky, the creator of the Solana-based lending platform MarginFi, has announced his departure from the project, triggering a significant outflow of funds from the protocol.

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

“I don’t agree with the way things have been done internally or externally. […] Let this be a clear statement of my intentions and principles,” he wrote.

Pavlovsky added that he is “not interested in tokens, money, or anything of the sort.” However, lawyers “continue to deal with it,” according to his post.

According to DeFi Llama, at the time of writing, MarginFi ranks fifth in the Solana ecosystem by total value locked (TVL) with $558 million. In the last 24 hours, it has lost over $166 million — about 30%.

MarginFi confirmed the founder’s departure, citing “internal operational disagreements and personal reasons.” The team assured that this does not affect the protocol, and all products remain fully functional.

On the evening of April 10, the liquid staking platform SolBlaze publicly accused MarginFi of unfair behavior in distributing reward tokens owed to users. The protocol team allegedly accumulated BLZE over three “weekly emission periods” in its own multisig wallet.

Effective immediately we are suspending BLZE emissions allocations for bSOL and BLZE deposited on @marginfi. They have acted in bad faith and have violated SolBlaze emissions guidelines by not distributing emissions allocations to users.

(learn about bad faith actions below)

— ?? SolBlaze.org | Stake with us! (@solblaze_org) April 10, 2024

SolBlaze also claimed that MarginFi developers, contrary to the rules, disposed of the BLZE received by the platform, intended for governance participation.

Following Pavlovsky’s departure, SolBlaze stated that they managed to establish communication with the lending platform team. However, several issues remain unresolved, including the resumption of token allocations for MarginFi users. Now, support from the staking protocol’s DAO is required for this.

Today was a rough day for Solana. No matter where you stand, it hurts to see people fighting each other with anger instead of working together to build a better ecosystem.

Been in communication with the @marginfi team and happy to share some updates and clarifications below.

— ?? SolBlaze.org | Stake with us! (@solblaze_org) April 11, 2024

The projects also failed to reach a consensus regarding the period during which MarginFi did not distribute BLZE to clients. According to the platform team, this lasted the past eight days amid Solana’s overload issues. SolBlaze noted that they received complaints earlier.

MarginFi assured users of compensation for all due payments.

Happy to work with the Solblaze team to resolve some of the comments and confusion from earlier

marginfi was one of the first Solblaze integrations and plans to continue supporting these efforts going forward

Users will be refunded for the period when emissions were not active… https://t.co/v2YR2mo62b

— marginfi ◼️ (@marginfi) April 11, 2024

Back in January, CoinGecko analysts included MarginFi in a list of projects expected to conduct an airdrop in 2024.