Lily Liu, the president of the Solana Foundation, has stepped into the escalating conflict between Kamino Finance, a prominent figure in Solana”s lending sector, and the recently launched Jupiter Lend. Jupiter Lend, which commenced operations in August, has rapidly achieved a total value locked (TVL) of $1 billion. The entire lending market on Solana is estimated at around $5 billion, a stark contrast to Ethereum”s $50 billion and the massive liquidity within traditional finance (TradFi) markets.
In her recent comments, Liu highlighted the competitive nature of the Solana lending landscape, acknowledging the significant gap in market valuations. This discrepancy has intensified competition among protocols, fostering rapid innovation but also rising tensions. Liu expressed a desire for collaboration rather than conflict, stating, “Hey @kamino @jup_lend, Love you both… We can snipe at one another… or we can focus on capturing market share from all of crypto and then Tradfi beyond that.”
The rivalry between Kamino Finance and Jupiter Lend stems from allegations that Jupiter Lend has misrepresented its risk isolation and rehypothecation practices. Critics, including founders from competing platforms like Kamino and Fluid, have accused Jupiter Lend of misleading users by presenting its vaults as offering complete isolation. Such claims raise concerns about potential systemic risks within the broader decentralized finance (DeFi) ecosystem.
Kash Dhanda, co-founder of Jupiter Lend, acknowledged that the initial claim of “zero contagion” was not entirely accurate. However, he defended the platform”s approach, explaining that rehypothecation is employed to optimize yields on collateral while ensuring that risks are contained at the asset level. In contrast, Marius, the founder of Kamino, argues that the structure of Jupiter Lend”s vaults allows for complete inter-asset exposure, which he believes could undermine confidence in the entire Solana DeFi ecosystem.
Fluid”s founder, Samyak Jain, has also criticized Jupiter”s practices, asserting that the platform”s vaults effectively reuse user collateral for yield generation, contradicting the promise of full isolation. As the situation develops, the Solana lending market is poised for further scrutiny as stakeholders evaluate the implications of these rivalries on user trust and market stability.
