Kamino Finance Launches New Jito Marketplace from Kamino Lend to Accelerate JitoSOL Growth

by
Alyssa Davidson

Posted: Nov 5, 2024 1:46 AM Updated: Nov 5, 2024 1:46 AM

by well

Correction and fact check date: November 5, 2024, 1:46 AM

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Kamino Finance, a Solana-based liquidity management tool, has launched Jito Market within Kamino Lend. This isolated marketplace is designed to fuel the growth of JitoSOL and could pave the way for other assets in the Jito ecosystem, such as VRT, to be integrated into Kamino Lend. In particular, Jito Market is the base for Kamino’s first 10x Multiply vault. The market is currently live and the SOL deposit limit is $10 million.

JitoSOL holds a dominant position in the SOL Liquid Stake Token (LST) market, accounting for over 43% with over 14 million SOL staked. Despite this, only a small portion of JitoSOL is actively utilized within decentralized finance (DeFi). The Jito Market is specifically created to provide new, low-risk return opportunities to JitoSOL holders. Initially, the market includes only JitoSOL and SOL, with JitoSOL assigned a 90% loan-to-value (LTV) ratio to facilitate a capital-efficient loop between the two assets.

The market launch includes JitoSOL and SOL as the only assets. A 90% LTV has been set for JitoSOL, allowing for a leverage loop of up to 10x between JitoSOL and SOL, increasing exposure to JitoSOL’s staking Annual Yield (APY). To encourage SOL contributions, JTO rewards are distributed to SOL lenders starting at 8,000 JTO per week.

The main goal of Jito Market in the early stages is to support efficient looping between JitoSOL and SOL. As the market develops, more tokens in the Jito ecosystem, such as VRT, can potentially be incorporated to unlock additional and unique revenue opportunities.

Kamino Finance launches JitoSOL Multiply

To further simplify the process, Kamino Finance has introduced a new marketplace-built 10x Multiply vault. Kamino Multiply is a user-friendly, one-click yield product that increases exposure to JitoSOL yields while maintaining full SOL price exposure. Users simply deposit JitoSOL and Multiply automatically sets up loop positions where JitoSOL is supplied and SOL is borrowed.

User positions are comprised entirely of SOL fixed assets (JitoSOL and SOL), so users maintain full exposure to SOL prices without facing liquidation risk due to price fluctuations. This design provides an additional layer of security by ensuring that price fluctuations in SOL do not lead to liquidation.

To further keep users safe, Kamino has implemented two important mechanisms: First, we developed a specialized LST price feed that is robust to temporary market depegs. Although JitoSOL has not faced any depegging, this infrastructure protects Multiply users from the potential impact if such an event occurs. Second, the utilization rate of SOL borrowings in the land market is limited to 87%, and the maximum utilization rate is about 6.5%. This structure ensures that JitoSOL Multiply remains profitable even when the SOL borrowing limit is reached.

Kamino Finance is a decentralized finance (DeFi) protocol that combines lending, liquidity provision, and leverage into its platform. It allows users to engage in automated one-click return strategies, leverage concentrated liquidity positions as collateral, and create automated liquidity strategies for efficient and optimized returns.