Solana's lending industry is facing one of its most visible internal disputes of the year, sparking concerns about how public conflicts can affect trust in the ecosystem. A tense exchange between Kamino Finance and Jupiter Lend has now involved Solana Foundation President Lily Liu, who has urged both projects to direct their energy toward growing Solana's overall lending market.
In brief
- Liu warns Kamino and Jupiter Lend that public disputes can damage confidence in Solana's $5 billion lending market.
- Jupiter Lend's rapid growth is raising concerns among competitors over collateral reuse and risk disclosure.
- Kamino claims that Jupiter's vault isolation message misled users, citing exposure related to loop strategies.
- Kamino blocks Jupiter's migration tool, saying access will return once details of the risks are clearly communicated.
The president of the Solana Foundation calls for calm
Liu intervened in the discussion as both protocols continued to criticize each other's design choices and user security approach. The Solana Foundation president noted that the network's lending market is around $5 billion — well below Ethereum's $50 billion and larger collateral bases seen in traditional finance.
She pointed out that the conflict could harm Solana more than it helps her. Liu added that internal disputes distract from expanding the network's presence in crypto lending.
She called on both teams to shift their focus from public clashes to growing Solana's presence in crypto and traditional lending. Liu signaled concern that continued disputes could undermine user confidence in the network's DeFi sector.
Jupiter Lend, launched in August, quickly reached $1 billion in TVL. This rapid growth has prompted questions from competing protocols about how collateral is managed and whether users have a clear view of risk management.
Kamino founder Marius issued strong criticism, saying that Jupiter Lend promoted its coffers as isolated when, in his opinion, this was not the case. He said users weren't given enough information about the exposure created when collateral is reused inside the system.
Kamino reacts against Jupiter Lend over “Zero Contagion” message
Jupiter Lend co-founder Kash Dhanda responded by acknowledging that the earlier language of “zero contagion” was not entirely accurate, although he insisted that risks remain linked to each individual asset.
Key points of the dispute include:
- Claims that the vaults of Jupiter Lend recycle collateral between positions without clear and early disclosure.
- There are concerns that this structure could expose users to risks related to other assets involved in loop strategies.
- Statements from Kamino and Fluid asserting that Jupiter's message did not fully correspond to the actual behavior of the vaults.
- Screenshots and videos showing old Jupiter posts describing the vaults as non-contaminating.
- Kamino's decision to block the Jupiter migration tool due to concerns over risk description.
Marius explained that he would not enable easy migrations if users did not fully understand how their warranty worked inside Jupiter Lend. He explained that someone providing SOL and borrowing USDC could still see their SOL lent to asset-linked loops like JupSOL or INF, giving them exposure to more than just their chosen pair.
He added that Kamino will restore access to migration once risks are clearly communicated to both sides and two-way tools provide accurate information.
Dhanda maintains that Jupiter Lend's structure contains asset-level risks and that remortgaging is part of how returns are generated. However, the leaders of Kamino and Fluid remain in a doubtful position.
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