Lily Liu, the president of the Solana Foundation, has entered the growing feud between Kamino Finance, an established player in Solana’s lending market, and Jupiter Lend, a more recent entrant into the lending space.
Jupiter launched Jupiter Lend in August, and it has already grown to $1 billion in TVL. The Solana lending market is currently valued at around $5 billion, a number that is significantly dwarfed by Ethereum’s $50 billion and the trillions in TradFi collateral markets.
Solana Foundation’s president does not mind the competition
Lily Liu, president of the Solana Foundation, referenced the current valuation of Solana’s lending market in her post.
That gap is what is fueling the competitive landscape in Solana’s lending sector. While it has led to rapid innovation, tensions have been rising between protocols vying for dominance.
“Hey @kamino @jup_lend, Love you both,” she wrote. “…We can snipe at one another (one click lending position conversion; dunking on sloppy remarks; etc) or we can focus on capturing market share from all of crypto and then Tradfi beyond that.”
As the Solana Foundation executive is concerned, competition has always been healthy for the space, but it is crucial not to lose sight of the main goal, which is capturing more market share from Ethereum and TradFi.
Why are Kamino Finance and Jupiter Lend feuding?
Jupiter Lend had had to contend with accusations that the protocol misled users about the platform’s risk isolation and rehypothecation practices, with critics (mostly founders from rival protocols like Kamino and Fluid) claiming that Jupiter Lend falsely advertised its vaults as completely isolated, an act that could potentially expose the broader DeFi space to contagion during market stress.
While Kash Dhanda, Jupiter Lend’s co-founder, admitted that the initial “zero contagion” assertion was not 100% accurate, the executive insisted that rehypothecation occurs to generate yields on collateral, but the risk remains limited and contained at the asset level.
As far as Kamino’s founder, Marius is concerned, Jupiter Lend’s vaults enable full inter-asset exposure that could undermine confidence in the entire Solana DeFi ecosystem. The executive has publicly criticized Dhanda’s Jupiter Lend for “misleading users.”
Fluid’s founder Samyak Jain pointed out that the platform’s vaults actually reuse user collateral for yield optimization, contradicting the notion of full isolation.
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