Today we’re introducing a new Jito Market to Kamino Lend. This isolated market will enable the rapid growth of JitoSOL, and can lead to the onboarding of other Jito ecosystem assets such as VRTs to Kamino Lend. Significantly, the Jito Market is now powering Kamino’s first-ever 10x Multiply vault.
Introduction
Kamino and Jito are fully aligned in their goal of expanding the Solana LST ecosystem. With past and ongoing initiatives to solidify JitoSOL as a key liquidity pair, as well as product offerings like JitoSOL Multiply that open up valuable use-cases for JitoSOL on Kamino.
Although JitoSOL commands over 43% of the Solana LST market, with over 14M SOL currently staked. However, only a small portion of JitoSOL is actively deployed into DeFi. With $840M in LSTs deposited, Kamino’s Main Market is by far the largest LST venue in Solana DeFi.
In deploying a Jito Market, the goal is to accelerate the growth of JitoSOL in a tailored environment. The Jito Market will create unique, low-risk yield opportunities for JitoSOL holders, and in turn can significantly increase JitoSOL circulating supply, furthering its dominance in the LST ecosystem.
The Jito Market
At launch, the Jito market consists of two assets, JitoSOL and SOL. A 90% LTV is assigned to JitoSOL, which enables up to a 10x loop between JitoSOL and SOL for increased exposure to the JitoSOL staking APY. To encourage SOL supply in the new market, JTO incentives will be awarded to SOL lenders, with incentives starting at 8,000 JTO per week.
In its first phase, the core purpose of the new market is to enable efficient looping between JitoSOL and SOL. As the market matures, additional Jito ecosystem tokens such as VRTs can be onboarded to create new and unique yield opportunities.
As part of the launch, the first-ever 10x Multiply vault has been launched, powered by the Jito Market. The vault is live here.
Below we cover how Multiply works:
JitoSOL Multiply
Kamino’s SOL Multiply is a simple yield product that increases your exposure to a yield-bearing asset like JitoSOL. This enables users to boost their JitoSOL APY, given normal market conditions.
Users simply deposit JitoSOL, and Multiply automatically creates a looped position with JitoSOL supplied and SOL borrowed. As the JitoSOL APY is higher than the SOL borrow APY, a higher multiplier leads to higher yield.
And, as the position contains only SOL-pegged assets (JitoSOL and SOL itself), users retain 100% SOL price exposure, while having no liquidation risk from SOL price movements.
To further ensure user safety in Multiply, Kamino has implemented two key mechanisms:
- Kamino has specifically designed LST price feeds to be immune to temporary market depegs. Although JitoSOL has not experienced a significant depeg event, this infrastructure ensures that, should a temporary market depeg occur, it has zero impact on JitoSOL Multiply users.
- SOL borrowing in the Jito Market is capped at 87% utilization, at which point the borrow rate is ~6.5%. This keeps JitoSOL Multiply profitable even at maximum SOL utilization
You can read more about Multiply’s safety infrastructure here.
Combined, all of the above safety measures enable users to Multiply their exposure with low liquidation risk.
Moving Forward
The launch of the Jito Market is a significant step in Kamino and Jito’s continued collaboration. With extensive growth potential for JitoSOL, as well as Jito’s VRTs, the market is set to become a key venue for the Jito ecosystem’s DeFi initiatives.
At launch, SOL deposits into the JitoSOL vault is capped at $10M. Caps and incentives will be evaluated as the market grows.