Kamino Finance: What You Need to Know
KMNO, New Offerings, & More
Last week saw a lot of developments in the way of airdrops, from token launches to new anti-sybil measures, and more. One project at the focal point of farmers was KMNO. KMNO took the top lending protocol spot from Marginfi, mostly because of token incentives. This is what ultimately contributed to Marginfi’s Co-founder stepping down and casting a general shadow of doubt over the project, and the value of its points program. This led to more capital flowing into Kamino which explicitly conveyed its plans regarding TGE, even seeing ~$2M in KMNO points volume traded on Whales Market across 2 months. Kamino remains in the top spot even after it’s TGE, actually seeing an overall increase in TVL although one must also take into account the rise in SOL price.
With Kamino’s season 2 keeping the token rewards coming and less baggage compared to Marginfi, Kamino is a good protocol to keep in mind for parking Solana-based capital. In today’s edition, we’ll run you through the basics of Kamino Finance, including what makes it the top lending protocol on Solana (besides its airdrop), KMNO tokenomics, and more.
Stay alert, stay informed ⬇
Background on Kamino Finance
First and foremost, Kamino is primarily a lending market, though its offerings have since expanded beyond this capacity. Users can borrow and lend a host of bluechip assets, including SOL as well as it’s most popular LST variants e.g. JitoSOL, mSOL, bSOL, as well as some LP pairings. Popular alts including BONK, WIF, PYTH, JUP and more can also be deposited though those have low or no maximum LTV ratios as these assets are inherently more risky. Users can also lend a number of assets at once via JLP, which is made up of
Beyond lending, Kamino now provides a basket of offerings including leveraged farming, LP aggregation, and even perps in a limited capacity. The protocol describes itself as Solana’s ‘liquidity, leverage & lending hub’. Kamino’s ‘Multiply’ option is an automated looping strategy, allowing up to 5x leveraged farming. This concept was first popularized with Radiant, which made it worth users time by adding RDNT incentives, considering the actual extra yield eeked out from continuously looping may not be enough of an attraction. Kamino uses points boosts as its incentive for Multiplied farming. While the protocol doesn’t outright guarantee that liquidations won’t happen, it does emphasize that capital deposited into the multiply feature hasn’t faced this issue thus far. Some time ago the mSOL oracle faced an issue which did result in some liquidations for loopers on Solana. If such an incident were to occur users could maybe even be made whole or be reimbursed.
Besides looping, Kamino also has some DEX LP aggregation services, though this makes up a much smaller portion of overall TVL. Kamino automatically swaps deposited tokens into the equivalent LP token with yields auto-compounding. Last but not least, Kamino also offers limited leverage trading. Users can access 1.8x - 6.7x on a small array of assets including SOL and LST derivatives, stablecoins, tBTC and ETH. The UI is simplified to provide either bull or bear options (long or short). Trades are denominated in USDC or USDT. Because the mechanism of leverage is derived from flash loans, users pay the equivalent of funding fees in a borrow fee, which comes out to ~13.5% across products and leverage levels.
KMNO Tokenomics
Naturally, a lot of focus has been pointed toward Kamino’s tokenomics. The KMNO token launched last week, at a time when there weren’t many other ways for market participants to make money, as the market was experiencing a widspread correction. The token dumped immediately upon launch, before returning to a median price of ~$0.07 the past few days.
This KMNO airdrop isn’t an isolated event; points continue to tally as the incentives program enters its second season. KMNO has a total supply of 10 billion tokens with 750 million of this supply allocated thus far via the season 1 distribution. Those who stake KMNO activate points earn rate boosts, somewhat similar to DeFi projects in the past offering stakers enhanced incentives though these new points are non-tradable, for now.
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