What Is Kamino Finance? How the Solana Lending Protocol Works

Kamino launched in August 2022 with automated liquidity vaults ⁸. Its lending markets, Kamino Lend, appeared on DefiLlama in November 2023 ¹¹. The protocol came out of Hubble Protocol, the Solana project behind the USDH stablecoin. Marius Ciubotariu, a former Bloomberg engineer, is listed as a co-founder of both ¹³.

Kamino's terms page describes the protocol but names no legal operator or governing jurisdiction ¹. If you need to know who you contract with, check that page directly before using the app.

Kamino Lend is a pooled money market. Lenders deposit into a reserve, and borrowers draw from that reserve against collateral ²³. The interest rate floats with utilization, which is the share of the reserve that has been lent out. Fixed-rate borrowing and standing borrow orders are also documented ².

The protocol is split into isolated markets. Collateral in one market cannot back a loan in another, so trouble in one market does not spread to the rest ³:

• SOL/BTC market: the primary market. Assets include SOL, wETH, tBTC, USDC, USDT, JitoSOL, mSOL and bSOL.
• JLP market: for borrowing against Jupiter's JLP liquidity token.
• Altcoins market: lower loan-to-value (LTV) limits for more volatile assets.
• Prime market: custom risk settings for larger, institutional positions.

By default a position runs in Cross mode, where all collateral and debt in one position are measured together. Elevation mode (eMode) allows higher LTVs for closely correlated pairs, such as a liquid staking token borrowed against SOL ³. Curators such as Gauntlet, Steakhouse Financial and Allez Labs can also set up their own isolated markets and vaults with their own parameters ².

To use Kamino you connect a Solana wallet such as Phantom to the app and approve each deposit or borrow on-chain. The docs checked describe wallet-based use, not an account sign-up. For background, see what is DeFi.

Earn (lending vaults). You deposit one token and receive vault shares. A single curator decides how to spread that capital across lending reserves ⁷. Curators earn a performance fee taken from yield, not from principal, and can charge an annual AUM fee. Withdrawals may carry a small penalty that is paid back to the vault's remaining depositors ⁷. Rates vary by vault, so check each vault's page. Curators allocate at their own discretion; no governance vote approves individual moves ⁷.

Multiply. Multiply builds a leveraged position in one transaction. It takes a flash loan, swaps into the target asset, deposits it as collateral, borrows against it and repays the flash loan. If any step fails, the whole transaction reverts ⁶. Kamino charges a 0.001% flash loan fee at open, adjust and close ⁶. Documented maximum LTVs range from 67% for JLP against USDC (about 3.2x) to 90% for JitoSOL against SOL (10x) ⁶. The trade only earns while the collateral yield exceeds the borrow rate. If SOL borrowing costs rise above JitoSOL's staking yield, the net return turns negative ⁶. See liquid staking.

Liquidity vaults. These automate concentrated liquidity positions on Solana DEX pools. You receive kTokens, which can in turn be used as collateral in Kamino Lend ⁸. Impermanent loss applies as with any LP position; see yield farming.

Kamino Borrow charges no deposit, withdrawal or origination fee ⁴. Borrowers pay floating interest. The protocol keeps a slice of that interest, called the spread, before the rest reaches lenders ⁴:

Illustrative example using Kamino's own figures: at a 10% borrow rate and a 15% spread, lenders receive 8.5% ⁴. On top of this you pay Solana network fees, a liquidation penalty if you are liquidated, and vault fees if you use Earn.

A position can be liquidated as soon as its current LTV crosses the reserve's liquidation LTV. There is no grace period, and anyone can run a liquidation bot ⁵. Each liquidation closes up to 20% of the debt. Once LTV passes the insolvency-risk threshold (typically 95%), the whole position can be closed at once ⁵.

The liquidator's bonus comes out of your collateral and grows as the breach widens. In Kamino's example, with a 2% minimum and 8% maximum bonus at a 75% liquidation LTV, the bonus is 2% at 75%, 5% at 80% and 8% from 83% ⁵. Borrow factors on some debt assets can raise your effective LTV faster than the headline numbers suggest ⁵. Auto-deleveraging exists as a last resort for positions liquidations cannot fix. Kamino says it has never been triggered ⁵.

Kamino lists audits of Lend by Sec3, OtterSec and RX, and of its vaults, farms, oracle and limit-order programs by OtterSec, Offside Labs and Sec3. It also lists Certora formal verification and Ackee fuzz testing (September 2025) ⁹. Prices come from Chainlink, Pyth, Switchboard, Redstone and Kamino's own Scope aggregator ⁹.

Kamino also reports more than $120 million liquidated across 100,000+ liquidations with no bad debt ⁹. That figure is self-reported. An audit lowers the odds of a bug but is not insurance. The security page does not explain who can upgrade the programs or whether a bug bounty exists ⁹.

The main risks are:

• smart-contract bugs;
• oracle errors;
• a depeg of liquid staking tokens or stablecoins used as collateral;
• curator misallocation in Earn vaults;
• Solana network congestion delaying a repay or top-up.

KMNO is Kamino's native token on Solana. It launched on April 30, 2024 with a fixed supply of 10 billion and about 1 billion circulating at launch ¹⁰. The allocation is 35% community and grants, 35% stakeholders and advisors, 20% core contributors and 10% liquidity and treasury. Insider allocations had a 12-month lockup followed by 24 months of vesting. Existing users received 7.5% of supply at genesis ¹⁰. The KMNO doc page does not describe staking or voting mechanics; it points to the governance forum at gov.kamino.finance ¹⁰.

Kamino is a Solana-only pooled lender, so it is mostly used with Solana assets: SOL, liquid staking tokens, JLP and Solana stablecoins. Aave and Morpho serve similar functions mainly on EVM chains, and Morpho shares the curator-vault model. For a scored comparison, see the lending platform ratings.