December 2025 marked a strategic inflection point for Kamino Lend, with the launch of the Prime Market continues the shift in user behavior and risk appetite towards real world yield. Prime debuted as the second-largest market by month-end at $283M supply, signaling strong institutional and user demand for high-yield, real-world-asset-backed credit. While stablecoins dominated previous months, December saw SOL-denominated activity regain momentum, with supply stable even amid a broader market drawdown.
The month also spotlighted Kamino on the main stage at Solana Breakpoint, where it unveiled its “Next Chapter” vision: positioning itself as Solana’s credit coordination layer. With six new products - from fixed-rate lending to custody-integrated borrowing - Kamino laid the foundation for a structured, institutionally-ready credit ecosystem in 2026.
1. Overview of Market Performance
Kamino closed out 2025 with robust diversified activity, navigating seasonal slowdowns and mid-month volatility with resilience. Despite a 7% drawdown in SOL price, the protocol sustained high user engagement and liquidity velocity across markets.
December’s figures reflect short-term consolidation, but the longer-term growth trajectory remains clear: total supply is up 14% year-over-year, debt outstanding increased 8.5%, transaction volume more than doubled (x2.3), and active liquidators continue to grow, reflecting ecosystem maturity.
Kamino closed December with:
- Total Supply: $3.3B (-3.8%)
- Total Debt: $1.2B (-2.6%)
- TVL: $2.12B (-4.4%)
- SOL Price: $124 (-7%)
- Transaction Volume: $15.5B (-49%)
- Interest Paid: $5.8M (-6.5%)
- Liquidations: 3387 (-80%)
- Collateral Seized: $3.9M (-85%)
- Distinct Wallets: 111,650 (+0%)
Despite the market pullback, contractions in protocol supply and borrowing were limited. Kamino’s liquidation infra remained highly efficient, and users displayed readiness: liquidations and deleveraging was limited even amid volatility. Stablecoin supply consolidated slightly, while SOL held - a reversal from the stablecoin-dominant trend earlier in the year.
Kamino’s leverage layer works across market cycles, enabling users to access structured risk or yield opportunities whether denominated in stables with RWA yield or SOL and onchain yield.
Rates remained subdued across core markets in December, with new demand from the PRIME market pushing the lending yield to 3.6%, over 10% above the benchmark.
December also saw Kamino lay out its institutional vision for 2026 and beyond. During Solana Breakpoint, Kamino shared a new product suite aimed at institutional adoption and structured credit markets:
- Fixed Rates & Fixed Terms: Predictable borrowing costs for strategies.
- Borrow Intents: Limit-order-style price discovery for onchain credit.
- Custody-Integrated Borrowing: Direct borrowing against assets held in qualified custodians (e.g., Anchorage, FalconX).
- Private Credit Vaults: Connecting DeFi liquidity to institutional credit.
- RWA DEX: Liquidity for tokenized real-world assets.
- BuildKit: Plug-and-play DeFi infrastructure for consumer apps.
Kamino is evolving to a credit coordination layer - enabling everything from passive vault strategies to bespoke institutional flows, all within the Solana execution layer.
2. Supply & Borrowing Trends
December’s supply dynamics were defined by the Prime Market launch which became the protocol’s second-largest market, in parallel of rotation back toward SOL-denominated positions after months of stablecoin growth.
Market-level trends:
The Main Market continues to anchor the protocol at $2.32B (70% of total supply), absorbing much of the SOL price contraction. With Prime and Maple rise to the top, V2 isolated markets are now a fifth of total supply ($695M), up significantly from prior months. Notably:
- Prime: $283M supply (new) / $123M debt - The newly launched RWA market immediately captured the #2 market position, validating institutional demand for real-world asset credit.
- Maple: $236M supply (+12.5%) / $95M debt (+8.3%) - Institutional credit market maintains strong position with high utilization.
- Marinade: $32M supply (-31.3%)/ $14M debt (-30.9%) - LST-focused market for mSOL strategies contraction continues, with liquidity favouring the more stable Main market.
- OnRe: $28.9M supply (+211%) / $8.3M debt (+51%) - RWA insurance market with steady growth.
- Solstice: $24.8M supply (-35.75%) / $9.2M debt - likely due to a loss of confidence related to the recent oracle flashcrash.
The Prime Market launched as Kamino’s flagship RWA integration, backed by U.S. real-estate-secured HELOCs (home equity lines of credit). Developed by Figure and issued by Hastra Finance, Prime tokenizes a lending pool for HELOC originations. The vault offers yields up to 8% APY, secured by assets with a 68% average LTV and <0.1% historical defaults. The market’s immediate success, becoming the #2 market by size in its first month, validates strong demand for RWA-backed credit on Solana.
Meanwhile JLP fell from it year long leading 2nd place down 25% to $228M supply and $61.6M debt (-38%) continues to unwind with the fall from perp fee return. Jito (-34.6%), Marinade also contracted while Solblaze, Huma, Sanctum and the Bitcoin markets grew slightly.
Asset-level trends:
Major flows reflected the Prime Market launch, JLP unwinding and continued appeal of BTC and PYUSD:
- PRIME: +$148M - Flagship RWA market launch meeting strong demand
- JITOSOL: +$75M - Strong LST growth as users consolidate positions in the main market
- PYUSD: +$38M - Continued growth driven by attractive rates and PayPal ecosystem adoption. With PYUSD’s circulating supply at ~$3.9B, Kamino PYUSD supply holds ~13.5% of Solana’s PYUSD.
- cbBTC: +$27M - Tokenized Bitcoin demand persisting through market volatility
- USDC: +$19M - Modest growth as rates stabilized post-November volatility
- fwdSOL, cgntSOL, dSOL, bbSOL: New LSTs continue to diversify the pool
- syrupUSDC/ONyc: Demand for diversified yield continues to grow
Outflows suggest Jupiter assets migrating back to their native ecosystem:
- JLP: -$64M - Continued migration as Jupiter launched native lending
- MSOL: -$63M - LST consolidation toward JitoSOL
- CASH: -$39M - Rebalancing after rapid incentive boosted growth
- JupSOL: -$12M - Migration to JupLend ecosystem
On the debt side, borrowing patterns showed interesting rebalancing:
- PYUSD Debt: +$75M - Strong borrowing demand alongside supply growth, driving high utilization
- SOL Debt: +$12M - Users leveraging up at lower price points
- USDC Debt: -$91M - Significant deleveraging as rates normalized
- CASH Debt: -$23M - Rebalancing after rapid incentive boosted growth
As new stablecoins and stable yield opportunities emerge, competition is fierce and some mercenary liquidity follows opportunity arbitraging among correlated assets. Users have paused their migrations to safer stablecoin strategies, with SOL markets strong.
3. Kamino V2 Vaults
Kamino’s Lending Vault ecosystem continued to expand in December, showcasing sustained demand for curated yield strategies even amid broader market consolidation. Across 23 actively managed vaults curated by 9 professional managers - including Sentora, Steakhouse Finance, Gauntlet, MEV Capital, and Allez Labs - the protocol generated $1M of interests in December, and $8.7M in cumulative interest.
Vault ecosystem performance
Vault TVL grew 5.4% to $637M, bucking the broader protocol liquidity stabilisation trend as PYUSD liquidity grew. The monthly +$31.7M supply growth of reflects sustained confidence while number of suppliers contracted by 8% to 5,910 with increased position size.
Top vaults by liquidity:
- Sentora PYUSD: $289M (+62.3%) 2,597 users - PYUSD lending vault grew 75% thanks to its 9% APY with incentives
- USDC Prime by Steakhouse: $177M (-16%) 4,362 users - Core Markets USDC lending at 4.5% APY with incentives
- CASH Earn: $67M (-48%) 1,325 users - APY now converged to PYUSD so liquidity is derisking to the more mature player at 8.7% APY with incentives
- Allez USDC: $35M (-8%) 1,270 users - Diversification across 9 lending markets at 6.4% APY including incentives
- Gauntlet USDC Prime: $23M (+0%) 492 users - Institutional-focused USDC strategy at 5.0% APY including incentives
- Allez SOL: $9M (-10%) 1,451 users - SOL/LST balanced exposure across 5 markets with 8% APY
December’s vault composition remained concentrated in stablecoins: PYUSD ($389M, 49%), USDC ($229M, 36%), and CASH ($67M, 10%). SOL/LST vaults grew 3% to $17M, benefiting from the SOL rotation trend. Sentora’s PYUSD vault emerged as a key driver of growth - now holding nearly 8% of Solana circulating PYUSD, driven by its strong APY and deep integration across Markets. Meanwhile, curators found new yield with Prime, the market was bootstrapped with liquidity from CASH Earn (Gauntlet), Elemental USDC Turbo (Elemental & Voltr), and Neutral Trade USDC Max Yield (Neutral Trade); showing further benefits of this cross market liquidity layer.
Vaults are now functioning as a key liquidity routing mechanism across Kamino’s market stack - from stables to SOL, from Core to Prime, from cross market efficiency to boostrapping new markets.
4. Stablecoin & SOL Markets
December marked the end of a multi-month stablecoin expansion trend, with both stablecoin and SOL-denominated liquidity stabilizing amid year-end repositioning. While supply and debt levels contracted slightly in USD terms, SOL grew in nominal terms and market activity remained healthy, and rates compressed as holiday withdrawals rebalanced liquidity across markets.
Dollar Markets
- Kamino Dollar supply: $1.31B
- Kamino Dollar debt: $758M
- Utilization: 57.9% (-1.2%)
- Supply rate: 2.47% (-10.2%)
- Borrow rate: 5.09% (-5.7%)
- Top Stablecoins: USDC $581M (44%), PYUSD $530M (41%)
December saw stablecoin rates stabilize compared to November’s volatility, particularly in the second half. Meanwhile the holiday period brought regained activity with a a build up of liquidity followed by withdrawals the last days of the year.
The Main Market dominated with $901M stablecoin supply and $451M debt, with a slight drop in utilization. The Prime Market jumped second to the Main market only, with $131M stablecoin supply and $123M debt in its first month. Maple stablecoins held steady at $122M, while JLP stablecoin supply contracted to $122M as leveraged trading activity moderated further. Smaller RWA markets like Solstice ($10.4M), OnRe ($6M), and Huma ($4.8M) liquidity stuck to these specialized niches.
At the asset level, stablecoin dynamics showed rebalancing among assets:
- PYUSD: +$38M supply, +$75M debt - Fastest-growing stablecoin by supply and debt reflecting generous incentives
- USDC: +$18M supply, -$92M debt - Modest inflows as rates stabilize
- CASH: -$38M supply, -$18M debt - Largest outflow as users rebalanced after rapid incentive boosted November growth
- USDS: +$2M supply, $+1M debt - Small but steady growth in Sky’s stablecoin, who’s just getting started on Solana
PYUSD clearly led in both lending demand and user inflows, while USDC remained a reserve asset with rebalancing activity. CASH saw the sharpest retreat following a period of accelerated growth.
SOL Markets
Kamino’s SOL-denominated markets showed resilience in December, holding steady despite a 7% SOL price drop. Utilization rose and rates compressed - a sign of sticky demand and user confidence:
- SOL supply: 4.28M SOL, $574M
- SOL debt: 3.56M SOL, $478M
- Utilization: 83.2% (+2.4%)
- Supply rate: 3.34% (-22%)
- Borrow rate: 4.71% (-24%)
The Main Market absorbed SOL inflows with +200k SOL supply growth, absorbing liquidity from other markets. User now favor the deeper available liquidity of the Main Market. LST markets showed mixed performance: Jito experienced outflows (-183k SOL supply, -126k SOL debt) as users consolidated positions, while smaller markets like SolBlaze (+25k SOL) and Sanctum (+9k SOL) saw modest growth. Marinade contracted (-39k SOL supply, -37k SOL debt) as users migrated to higher-liquidity LST venues.
SOL rates compressed this December, as SOL borrow curves were optimized for SOL Multiply looping:
- Borrow rates fell from 6.2% to 4.71% (-24%), with spikes early-to-mid month before stabilizing
- Supply rates declined from 4.3% to 3.34% (-22%)
- Utilization increased to 83.2% (+2.4%)
- Rate volatility decreased notably after December 20 as holiday trading activity subsided
Despite the drop in USD-denominated value, SOL markets remained active and healthy. The compression in rates - especially borrow rates dropping from 6.2% to 4.7% - improve liquidity and lower funding costs for levered strategies. The elevated utilization underscores a strong base of borrowers, particularly in LST-focused strategies.
5. Transaction Volume and User Behavior
December saw a significant reduction in transaction activity, with volume declining to $15.5B (-49% versus November). Surprisingly activity was low mid month, just before the holiday, and heated up as the end of the year approached.
Volume breakdown by transaction type:
- Deposits: $7.92B (-50%) - Reduced inflows reflecting holiday slowdown
- Withdrawals: $6.26B (-55%) - Lower reallocation activity as positions stabilized
- Borrows: $747M (-18%) - Continued decline in new leverage
- Repays: $577M (-12%) - Moderate deleveraging pace
- Liquidations: $6M (-88%) - Significantly lower liquidation volume reflecting calm markets
The deposit-to-withdrawal ratio of 1.3:1 indicates position building despite overall volume decline, suggesting confidence among active participants. The sharp decline in liquidation volume (-88%) reflects both reduced volatility and conservative user positioning.
User metrics prove stable among mixed sentiment. :
- Distinct wallets: 111,650 (+0.06%) - Essentially flat, indicating mature loyal user base
- Active positions (EoM): 128,483 (+0.11%) - Slight growth despite market conditions
- Transaction concentration: Main market dominated with $14.1B (91% of volume)
Kamino user bases remains active despite macro and seasonal headwinds, while much of the liquidity is long term holdings.
6. Market Movements & Liquidations
December marked a return to calm conditions across Kamino’s markets, with the lowest liquidation activity in recent months. A total of 3,387 liquidation events processed just $3.86M in collateral, representing an 80% drop in events and an 85% reduction in seized collateral compared to November.
Liquidation summary:
- Total events: 3,387 (-80%)
- Collateral seized: $3.86M (-85%)
- Debt repaid: $3.81M (-85%)
- Unique obligations liquidated: 2,976 (+57%)
- Unique liquidators: 166 (+44%)
- Average liquidation size: $1,631 (-40%)
- Median liquidation bonus: 1%
- Collateral-weighted average liquidation bonus (as % of total size): 0.18%
The dramatic reduction in liquidations reflects lower volatility and conservative user positioning following volatility, and for the holiday period. Despite SOL’s 7% price decline over the month, most liquidations were concentrated in early December (December 1-2 and 17-18), with almost no activity after December 19. December marked Kamino’s first auto-deleveraging (ADL) event, successfully stress-testing the protocol’s risk management infrastructure in a real-world scenario.
Adrena Auto-Deleveraging
December also marked a milestone: Kamino’s first auto-deleveraging (ADL) event, successfully stress-testing the protocol’s risk management infrastructure in a real-world scenario. ADL is a last-resort risk management mechanism that protects lenders when a market faces elevated risk. When triggered, it progressively lowers the LTV threshold at which positions become eligible for liquidation, ensuring orderly deleveraging without creating bad debt.
The Adrena market faced concerns as its protocol entered maintenance mode, and onchain liquidity degraded. Users were requested to deleverage and withdraw for over a month before the activation of ADL on December 18, 2025. Many did, reducing total market debt cleared to $138k. The event concluded with zero bad debt and a median liquidation bonus of 0.47% of position size. Adrena represented less than 0.01% of Kamino’s TVL, which enabled to test the ADL with contained exposure to validate this risk infrastructure.
7. Stress Testing
Portfolio risk across Kamino markets remained well-managed in December despite some volatility. Conservative LTV ratios continue providing substantial cushion against market volatility ensuring users could enjoy the holidays.
The stress tests liquidation graphs show an interesting picture with less collateral liquidated but more potential bad debt as collateral tail distribution have narrowed. We observe no exposure to price increases, indicating most shorts have been closed.
In stress scenarios, dominant collaterals such as SOL, JITOSOL, JupSOL, and JLP would carry the greatest liquidation exposure. However, these assets remain highly liquid on Solana with deep liquidity enabling orderly liquidations.
Stress test scenarios (instantaneous shock):
- 10% drop: $102M collateral at risk +104% MoM, no potential bad debt
- 20% drop: $234M collateral at risk +71% MoM, $5.17M potential bad debt +125% MoM
- 30% drop: $355M collateral at risk +29% MoM, $23.4M potential bad debt +102% MoM
- 40% drop: $506M collateral at risk +21% MoM, $52.7M potential bad debt +62% MoM
- 60% drop: $807M collateral at risk +5% MoM, $154M potential bad debt +29% MoM
Compared to November, December’s stress tests show higher modeled collateral at risk across moderate shock scenarios (10–40%), and higher modeled potential bad debt as a share of total debt at 20–60%. In practice, December’s real-world 7% decline over the month resulted in significantly less collateral liquidated than the modeled 10% instantaneous shock scenario ($3.86M vs $102M projected), consistent with gradual price movements giving users time to adjust positions.
8. Conclusions & Risk Considerations
December closed a pivotal year for Kamino with stability, resilience, and forward momentum towards new sources of yield. The Prime Market launched successfully, attracting $283M in deposits to become Kamino’s second-largest market within weeks. It marked a structural shift in market composition-bringing HELOC-backed real-world credit onchain.
The protocol also experienced its first Auto-Deleveraging (ADL) event in the Adrena market, successfully stress-testing depreciation infrastructure at low stakes with no systemic impact - an important milestone in risk management maturity.
Meanwhile, Kamino’s Lending Vault ecosystem grew by 5.4% to $637M, defying the broader conditions. With 5,910 suppliers across 23 strategies, vaults are a valued access point to Kamino yield. This is set to reinforce as Kamino’s suite of credit products complexifies with fixed rates, fixed term, RWA collaterals and more.
Kamino enters 2026 with a solid foundation of diversified collaterals and yield, battletested infrastructure, and a growing ecosystem of users, curators, partners, and institutional users.
This report represents independent risk analysis by Allez Labs for the Kamino Finance community. Analysis reflects protocol performance through December 2025.
Prepared by: Allez Labs Risk Team
Report Date: January 9, 2026
Next Report: January 2026 Monthly Report published in February 2026