Kamino Lend Monthly Risk Insights - October 2025
October brought with it the largest deleveraging event in crypto’s history. On Kamino this translated into modest supply contractions and sharp, volatility-driven liquidation activity. Total supply fell modestly to $4.5B (-3.5%) while borrow demand contracted slightly to $1.6B (-2.6%) - a measured deleveraging and cautious repositioning amid broader market turbulence.
On October 10th, Solana witnessed its largest-ever ecosystem liquidation cascade triggered by US-China trade war escalations. Kamino alone faciliated over 9,300 liquidations - processing $25.5M in collateral, a more than 4x increase from September. Despite this surge, liquidations remained orderly, representing less than 0.6% of total transaction volume, and the protocol ended the month with zero bad debt.
Transaction volume surged to $22.3B (+81.3%), while active wallet count remained stable at 113,077 (-0.9%), indicating that volume remains concentrated among sophisticated users engaged in active portfolio management.
Kamino’s vault layer continued its strong growth trajectory, expanding 25% to $741M. New entrants like Kamino Vault CASH ($98.5M) and continued strength in USDC Prime ($306M) and Sentora PYUSD ($175M) drove adoption, establishing vaults as a core distribution channel representing 16.5% of total protocol supply.
Stablecoin markets firmly established dominance over SOL, as supply is up to $1.4B, with CASH reaching $106M supply in its first month and PYUSD crossing $500M, while other assets like LSTs and tokenized BTC experienced significant outflows, led by cbBTC’s $152M outflow.
Kamino’s Strategic Focus in October:
- $CASH Growth Initiative launched with $540K monthly rewards, driving $20M+ deposits in hours
- $USX & Solstice integration with 5x Flares multipliers
- Multiply expanded to volatile pairs (SOL, cbBTC, PSOL) with up to 8x leverage, now offering a backtesting suite for users
1. Overview of Market Performance
October’s performance was defined by steady stablecoin supply growth alongside notable deleveraging and increased liquidation activity as volatility returned to crypto markets.
Kamino closed October with:
- Total Supply: $4.5B (-3.5%)
- Total Debt: $1.6B (-2.6%)
- TVL: $2.9B (-3.5%)
- Transaction Volume: $22.3B (+81.3%)
- Interest Paid: $8.6M (-14.7%)
- Liquidations: 9,372 (+309%)
- Collateral Seized: $25.5M (+307%)
- Distinct Wallets: 113,077 (-0.9%)
October 10th Stress Event
Extreme volatility swept through crypto markets following an escalation of the US - China tradewar. The reaction was swift: SOL dropped 14% in under an hour, falling from $207 to $177 in a sudden sell-off amid a broader $20B liquidation cascade across crypto, $2B of which hit Solana positions.
As a result, liquidation activity surged dramatically in October, with $25.5M of collateral liquidated in 9,372 events compared to 2,289 in September - a clear sign that market volatility tested the protocol’s risk systems. Kamino’s liquidation engine performed flawlessly, processing all liquidations without generating any bad debt.
More details in our October 10th risk event analysis.
Kamino’s navigated October focusing on stablecoins and precision:
- $CASH Growth Initiative launched with up to $540K monthly rewards, driving $20M+ deposits in hours
- Multiply expanded to volatile pairs (SOL, cbBTC, PSOL) with up to 8x leverage and net-positive yields with a full-suite analytics upgrade
- $USX & Solstice integration live with 5x Flares multipliers and 50K monthly rewards
- PYUSD on Kamino surpassed $500M deployed as Solana’s PYUSD supply hit $1B
- Real-time Multiply charts + backtesting rolled out
2. Supply & Borrowing Trends
October saw net outflows of 3.5% from both supply and debt, driven primarily by SOL position unwinding and leveraged LST strategy exits. Strong volumes point to continued capital reallocation from SOL leverage toward yield, as users rotated into passive vaults and stablecoin-based strategies.
Market-level trends:
The Main Market remained the protocol’s anchor, holding steady at approximately $3.5B in supply (78% of total) and $1.2B in debt. Other notable movements:
- JLP grew to $393M supply (+15.6%) and $114M debt (+8.5%), demonstrating regained competitiveness
- Maple continued strong growth to $164M supply (x2.18 MoM) and $72M debt (+41.2%) as demand grows
- LST Markets contracted, specifically Jito (-10.4% supply), Marinade (-23%), and Solblaze (-17%) retracted - only Sanctum’s market was stable
- RWAs showed mixed performance with Huma growing (+57.2% supply), OnRe contracting (-13%) and xStocks remaining stable
New markets showed early traction:
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Solstice closed its launch month with $13.5M supply and $3.8M debt. Solstice Finance is a Solana-native DeFi protocol delivering yield-bearing stablecoins:
- $USX is a synthetic stable backed 1:1 by assets like USDC, generating 15% APY through delta-neutral strategies in its YieldVault
- $eUSX is a tokenized share enabling composability across DeFi
On Kamino Finance, this integration unlocks powerful use cases: users can lend $USX/eUSX to earn base yields plus 50K monthly $USX rewards (5x Flares), borrow against it at low rates (<3% APR), or use Kamino Multiply for 1-click 4x leverage loops (24% net APY with up to 9x stacked Flares), blending stability, leverage, and reward farming in a seamless, high-efficiency flow.
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FlashTrade launched with $1.3M supply. Flash Trade is a decentralized spot and perpetuals exchange on Solana, enabling high-leverage trading (up to 100x) with low fees and minimal slippage through its innovative pool-to-peer model, where liquidity providers earn real yields from diversified multi-asset pools.
On Kamino Finance, Flash Trade integrates as a leveraged trading primitive within its $4B+ TVL ecosystem, allowing users to supply Flash Liquidity Pool (FLP.1) assets to Kamino Lend for yields (~12-18% APY boosted by incentives), borrow against them for spot/perps loops via Multiply (e.g., 6x $FAF/SOL at net-positive returns), or provide liquidity in Kamino vaults that supply to the market for yield.
Asset-level trends:
Major inflows:
- PYUSD up $214M surpassing $500M supply
- CASH emerged with $106M in new supply, a significant new stablecoin addition that’s meeting borrowing demand with $93.5M new debt
- USDC presence remains $34.5M, maintaining its position as the largest stablecoin with a 53% share
- dSOL added $80M increasing LST diversification
Major outflows:
- cbBTC lost $152M in supply the month’s largest single asset outflow
- JupSOL declined by $35M
- JITOSOL fell by $62M
- SOL supply increased slighly by $11.5M, ending a multi-month contraction
Kamino V2 Vaults
Kamino Lending Vaults continued strong momentum in October, expanding 25% to $741M in TVL across 10+ distinct vault strategies. This growth reflects increasing sophistication in yield aggregation and risk management across the protocol’s 20+ underlying markets.The vault layer is rapidly becoming a core distribution channel for protocol liquidity.
Vault Diversification
Vaults demonstrated meaningful diversification across three dimensions:
Asset diversity USDC vaults ($406M) remain dominant but no longer alone in driving growth. PYUSD vaults reached $178M, new CASH vaults launched with $98.5M, USDG vaults held $38M, and SOL-focused strategies deployed $35M+. This multi-asset approach reduces single-token concentration while capturing different yield opportunities.
Market allocation While 77% of protocol supply sits in the Main Market, vault strategies actively diversify across JLP (9%), Jito (6%), Maple (4%), and 15+ specialized V2 markets. Multi-market vaults like Allez USDC allocate across 10 different markets, creating exposure to varied risk/return profiles even when individual markets show concentration.
Yield sources Vaults tap fundamentally different return drivers: pure lending spreads (3-4%), leveraged trading fees (JLP/Adrena/FlashTrade), LST staking yields (6-8%), institutional/RWA credit (5-7%), and protocol incentives. This structural diversity provides resilience against single-source yield compression.
Top Vaults in October:
- USDC Prime reached $306M (+15%), serving 4,717 depositors with steady 3.5% APY
- Sentora PYUSD held $178M, becoming the second-largest vault
- Kamino Vault CASH launched strongly with $98.5M from 1,036 users at 4.5% APY
- Allez USDC grew to $64M (+1.6%), serving 1,447 users across diversified markets at 4% APY
- Steakhouse USDG maintained $30M with attractive 5.8% yields
Vaults now represent approximately 16.5% of total protocol supply, up from 13.5% in September, demonstrating their growing importance in Kamino’s product ecosystem. They’ve earned a combined $5.5M interests to Kamino users.
3. Stablecoin & SOL Markets
October solidified the structural rotation from SOL to stablecoins. While SOL showed modest supply growth, stablecoins dominated net inflows, with PYUSD and CASH leading the way.
SOL Markets
SOL markets showed modest growth but continued low utilization:
- SOL supply rose to 4.75M SOL (+3.2%)
- SOL debt edged up to 3.83M SOL (+0.5%)
- Utilization decreased to 80.7% (-2.1%)
- Supply and borrow rates decreased to 4.1% and 5.9% respectively
The Main Market remained the anchor for SOL liquidity with modest growth and LST markets showed mixed performance
- Jito grew to 664K SOL supplied (+10%) and 548K borrowed (-1%)
- Marinade slightly slipped to 369K SOL supplied (-22%) and 314K borrowed (-19%)
Kamino Stable Dollar Markets
Stablecoin markets saw explosive growth led by PYUSD and the new CASH token:
- Kamino Dollar supply rose $1.4B +$342.7M (+35%)
- Debt increased to $815.1M +60.5M (+8%)
- Utilization increased to 57.7% (-12.9%)
- Borrow rate increased to 5.74% (-1.35%)
- Supply rate increased to 2.9% (-1.4%)
Volatility in rates persisted due to recurring large whale rebalances, causing short-lived spikes in funding costs.
At the market level:
- Main Market dominated with $1.13B supplied (+31%) and $624M borrowed (+7.8%)
- JLP grew to $176M supplied (+41.9%) and $127M borrowed +(20.9%
- Maple grew steadily to $78.6M supplied (+37.4%) and $72
- M borrowed (+41.2%), supported by higher utilization following last month borrowing power increase
At the asset level:
- PYUSD led with $214M of inflows but debt declining by $21.5m
- CASH launched with $107M supply and $92M borrowed, immediately showing strong demand
- USDC grew $78M with debt up by $3.15M
October confirmed stablecoins as the primary growth engine, now representing just over 30% of total protocol supply versus SOL’s ~18%. The launch of CASH and continued PYUSD momentum demonstrate strong demand for diversified stablecoin yield.
4. Transaction Volume and User Behavior
Kamino processed $22.3B (+81.3%) in transaction volume in October, with activity dominated by deposits and withdrawals as users actively rebalanced portfolios.
Volume breakdown by transaction type:
- Deposits: $11.1B (+95%) with strong inflows into vaults and stablecoins
- Withdrawals: $9B (+84%) with elevated reallocation activity
- Borrows: $1.44B (+19%) as leverage appetite declines
- Repays: $791M (+20%) indicating positions deleveraging
Volume is concentrated on the Main Market with $20.8B, followed by Maple with $520M. Despite the 81% increase in transaction volume, two dominant actors account for ~70% of the volume. Distinct wallet count is stable at 113,077 (-0.9%), suggesting consolidation toward more sophisticated, higher-value users managing larger positions.
5. Market Movements & Liquidations
October experienced significant market volatility that triggered a sharp increase in liquidations. On October 10th. SOL dropped 14% in under an hour, in a sudden sell-off that led to the largest liquidation cascade of the history of crypto. We dive deep into this risk event in Kamino Lend, Risk Event Analysis: 10th of October 2025. Over 9,300 liquidation events were executed, processing $25.5M in collateral, more than 4x September’s activity.
This stress event drove a surge in liquidations, concentrated in SOL, JitoSOL, and Fartcoin collateral positions. Total collateral liquidated climbed to $25.5M, with the majority tied to SOL exposures in the Main Market. Despite the scale-up, all liquidations were executed efficiently and without generating bad debt.
Liquidation breakdown:
- Total events: 9,372 (+309% vs September)
- Collateral seized: $25.5M (+307%)
- Debt repaid: $25.1M (+309%)
- Unique wallets liquidated: 1,895 (+163%)
- Unique liquidators: 115 (+32%)
Collateral liquidated by asset:
- SOL: $15.6M 61% of total liquidations, 75% of which from SOL/USDC longs
- JITOSOL: $2.3M
- FARTCOIN: $2.0M indicating memecoin exposure
- JLP: $1.4M
- cbBTC: $1.0M
- Other assets: $3.6M spread across various tokens
Kamino’s liquidation engine functioned smoothly under stress, preserving protocol health and preventing systemic disruption. Liquidation fees remained minimal at .23% relative to position sizes, indicating a deep and competitive liquidator market that efficiently maintains protocol solvency without imposing excessive costs on liquidated users.
6. Stress Testing
Portfolio risk across Kamino markets rose moderately in October as liquidations cleared unhealthy positions while new loans were opened at lower LTVs. The protocol, and its robust liquidator network successfully navigated October’s volatility to protect protocol solvency.
LST-focused markets (Jito, Marinade, SolBlaze) naturally display tighter liquidation margins due to their correlated collateral-debt pairs, but maintain resilience through high asset quality. Similarly, markets with yielding and stable collateral like Maple and OnRe benefit from minimal price risk, having never experienced a liquidation event.
In stress scenarios, dominant collaterals such as SOL, JITOSOL, JupSOL, and JLP would carry the greatest liquidation exposure. However, October’s monitoring show these assets remain highly liquid on Solana, enabling orderly liquidations with limited market impact.
Total Collateral at Risk & Bad Debt Exposure (ceteris paribus):
- Should an instant 30% market drop occur, $245M in collateral could be liquidated (+9.9%), potentially resulting in $10.5M in bad debt stable
- In a 60% instantaneous crash scenario, liquidation exposure rises to $900M (-12.6%), with potential bad debt reaching $111.5M (-3.46%),under absolute worst case scenarios.
Systemic risk remains low. Modeled outcomes point to lower vulnerability under moderate shock scenarios (30–40% drawdowns). While October’s liquidations increased modestly from September’s low base, the orderly processing of 9,372 events demonstrates the protocol’s liquidation systems remain robust under real market conditions.
The deep liquidator network (115 active participants) and highly liquid collateral assets provide strong defenses against cascading failures. The October 10th stress test validated these systems under conditions more extreme than most modeled scenarios.
7. Conclusions & Risk Considerations
Kamino closed October with continued growth and battle-tested resilience. Supply stabilised at $4.5B and TVL $2.9B, driven by stablecoin inflows and vault adoption, while debt to $1.6B. Vaults expanded 25% to ~$741M, establishing themselves as a core distribution channel representing 16.5% of total protocol supply.
Market volatility triggered 9,372 liquidations and $25.5M in collateral seizures but all were executed efficiently without bad debt. The liquidation surge demonstrates the protocol can handle significant stress while maintaining solvency.
October highlighted important trends:
- Stablecoin dominance: PYUSD and new entrant CASH ($107M) led growth, while SOL leverage remained subdued
- cbBTC reversal: The $152M outflow signals shifting BTC collateral preferences
- Vault acceleration: 25% growth and new products like CASH vault demonstrate strong institutional adoption
Risk considerations looking ahead:
- Concentration Risk: While vaults provide diversification, 78% of supply remains in the Main Market which requires closer attention. There two dominant actors represent ~70% of transaction volume, large position movements are impacting borrow rates and liquidation dynamics.
- New Asset Integration: Monitor early-stage markets (Solstice, FlashTrade) for liquidity depth and user adoption patterns
Maintaining orderly markets in the largest liquidation of the industry once again validates Kamino’s risk infrastructure under volatile market conditions. As Q4 progresses, we anticipate further vault expansion, new market onboarding, and maintaining efficient risk parameterizations through potential further volatility.