Kamino TVL At All-Time High - How Are Most People Using Solana’s Biggest DeFi App?

Kamino Finance, the network’s biggest lending market, has established itself as a cornerstone of Solana DeFi. 

Recording over $1.6B in TVL (Total Value Locked), the platform has become an integral part of onchain DeFi strategies and dominated its competitors. Collectively, rival platforms like MarginFi and Save hold just over 42.25% of Kamino’s TVL, currently boasting $676M in assets.

What are the biggest markets on Kamino, and how are network participants using the platform?

Kamino Attracts Over 2.21B in User Deposits

On September 28, 2024, Kamino Finance notched a new all-time high in protocol TVL, recording over $1.61B stored on the platform based on DeFiLlama data. This represents an impressive 611% increase from the start of the year, when Kamino held $225M in TVL.

Kamino’s staggering TVL growth cannot be attributed to the increasing price of $SOL alone. While Kamino TVL has risen by 611% since January 1st, $SOL has only increased by 50.96%, surging from $104 to $157 in the same time frame.

Additionally, Kamino’s recorded TVL also accounts for funds borrowed from the platform. Discounting these assets, Solana DeFi users have supplied over $2.18B to Kamino’s lending market.

What Are Kamino’s Biggest Markets?

Unsurprisingly, the breakdown of asset utilization on Kamino leans heavily towards SOL and stablecoins. With over 3.2M SOL supplied to the platform valued at over $497M, SOL is easily the most commonly deposited single asset on Kamino.

The prevalence of deposited $SOL on Kamino illustrates users’ eagerness to engage in more complicated DeFi strategies. Currently, lending $SOL on Kamino offers roughly 4.71% APY, which is slightly less than typical native staking rates. 

This suggests that users believe they can outperform traditional staking rates by borrowing against their collateral and leveraging funds elsewhere in Solana’s DeFi ecosystem. It could be argued that this behavior is typical of ‘risk-on’ market conditions.

However, Kamino’s growing LST (Liquid Staking Token) lending markets indicate that Solana DeFi users are benefiting even further. Collectively, Solana LSTs make up the largest category of assets supplied to Kamino, with $jupSOL, $JitoSOL, and $mSOL totaling $613M in TVL.

Providing LSTs to the platform enables users to access greater capital efficiency from their holdings while still earning staking rewards.

$USDC and $PYUSD currently command the highest adoption among stablecoins. Across all Kamino’s lending markets, $USDC and $PYUSD total $272.6M and $272.2M in respective deposits.

$KMNO Up 61% As Markets Turn

Kamino’s native governance token, $KMNO, has reacted positively to the platform’s growing popularity and TVL. 

Despite only being used as a points multiplier within Kamino’s ongoing incentive program, $KMNO has enjoyed positive price appreciation throughout September. Since opening the month at $0.047, $KMNO has surged 61% to exchange hands at 0.076, based on Step Finance data.

$KMNO’s appreciation could also be due to the Kamino team’s recent unveiling of its v2 platform, which aims to bring a wealth of innovative new features to the protocol.

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