Marginfi CEO Resigns Amid Points Controversy and SolBlaze Dispute

Edgar Pavlovsky, the founder and now-former CEO of Marginfi, a Solana-based protocol allowing users to lend and borrow assets against their portfolio, has resigned, precipitating heavy outflows from the protocol.

On April 10, Pavlovsky took to Twitter to announce his departure. Pavlovsky said the move stemmed from disagreement with the project’s team over its internal and external operations. “As [Marginfi’s] founder, it’s ultimately my failure that this happened,” Pavlovsky said.

Marginfi acknowledged the exit of its former CEO, emphasizing that all of its products remain operational and are unaffected by Pavlovsky’s departure. “His departure is a function of internal operational disagreements and of his own personal reasons, and we respect his privacy,” the project tweeted.

Many Marginfi users reacted to the news by withdrawing their assets from the protocol en-masse. The project’s TVL has tumbled by $190 million or 25.5% to $559 million from $750 million on April 9, according to DeFi Llama.

Marginfi’s TVL is also down from an all-time high of $882 million on April 1.

Points controversy

The news comes as Marginfi faces increasing scrutiny over failing to announce a token for early adopters despite launching a points campaign in July 2023, igniting sustained TVL growth for the project.

In a now-deleted tweet published several hours before his resignation, Pavlovsky pledged he would work to ensure that Marginfi does not issue a token.

“Feels right to maximally push off any kind of token,” Pavlovsky said. “Will see what I can do internally to brick this.”

Sensing an opportunity, Solend, a Solana-based lending protocol with a $282.6 million TVL, announced on April 10 that it will airdrop tokens to users who migrate their assets over from Marginfi.

Social media commentary responding to Pavlovsky’s departure illustrates the fervent demand for an airdrop from Marginfi users.

“Drop the token,” said KookCapitalLLC, a popular web3 influencer.

“Can we bully some more founders to quit so the rest of the team drops some tokens?” said AkiraReloaded, the co-founder of Narcissus Gallery, an NFT project.

“Ohh no… Anyway wen $MRGN airdrop?,” said TobiWebIII, a self-described airdrop hunter.

Marginfi posted that its development team will continue working towards “full decentralization,” suggesting that it may capitulate and include the launch of a governance token as part of its roadmap.

SolBlaze dispute

Marginfi has also received criticism for allegedly offloading BLZE tokens it received in an airdrop from SolBlaze, a Solana staking protocol, and failing to distribute the tokens to eligible users.

SolBlaze said the tokens were intended to facilitate governance participation, adding that tokens allocated for Marginfi users have not been distributed in the past three weeks. Prior to Pavlovsky’s departure, SolBlaze posted that it suspended token emissions to Marginfi, accusing the project of acting in “bad faith.”

SolBlaze posted a follow-up after Pavlovsky’s exit, stating that it had made communication with the Marginfi team after weeks of silence.

SolBlaze said its token emissions were not distributed to Marginfi over the past 8 days due to widespread failed transactions on Solana, and that Marginfi committed to investigate user reports concerning unpaid emissions from the past three weeks.

SolBlaze added that new token emissions to Marginfi remain suspended, but Marginfi may appeal the decision through a proposal. “If Marginfi is willing to make amends with the SolBlaze community and acts in good faith going forward, the SolBlaze DAO may vote to reinstate Marginfi’s emissions,” it said.

“Happy to work with the SolBlaze team to resolve some of the comments and confusion from earlier,” Marginfi tweeted. “Users will be refunded for the period when emissions were not active in the coming days.”