Extreme volatility swept through crypto markets following an escalation of the US Chinese 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.
This triggered $20 million in collateral liquidations across Kamino markets, all processed seamlessly with zero bad debt. Kamino’s liquidation engine and its network of more than 110 active liquidators ensured an orderly response throughout the event.
Due to the off-hours timing, few users were able to manage their positions actively. Around 1,700 wallets were impacted, with total losses of $260k – a median of just 0.07% of the position size – highlighting the efficiency of Kamino’s risk engine.
For a detailed breakdown see the October 10th Dashboard.
On October 10, 2025, a sharp market correction driven by new U.S. tariffs on Chinese goods led to a wave of liquidations across crypto markets, dwarfing prior events like the COVID crash or FTX collapse in scale.
Kamino Lend performed robustly under stress, with no bad debt and efficient liquidation processing by a distributed network of 114 liquidators. DeFi earned widespread praise from the community for its resilience compared to centralized exchanges (CEXs), where stop-losses failed and stablecoins depegged.
Volatility on Kamino Assets
Tokens listed on Kamino Lend saw sharp declines within a 24-hour window. SOL fell from $220 to $177 intraday, a 19.5% drop, while some altcoins recorded drawdowns of up to 70%. On average, Kamino-listed assets lost 30% of their value at the crash’s peak, reflecting severe market stress.
How Users Responded
Trading activity suggests users had limited time to react and manage positions. Total non-vault transaction volumes reached $521M over the 24-hour window, with most of the activity occurring outside the peak volatility period.
Liquidation volume hit a new high with $20M collateral seized. Over 8,000 liquidation events were recorded, impacting nearly 1,700 wallets - slightly above February 2025 levels but contained given the drawdown’s scale.
Kamino’s liquidation system performed smoothly. More than 110 liquidators were active during the event, helping maintain pool solvency. They earned a total of $260k in fees, with a median fee of just 0.07% of the affected position size, reflecting cost efficiency.
Interest rates spiked briefly in response to market stress. Notably, USDC borrow rates surged to 45%, despite being the most liquid stablecoin across Kamino. Recently launched CASH reached 35%, while other stablecoins peaked near 10%. SOL borrow rates also saw a short-term jump to around 10%. Rates normalized quickly, reflecting protocol stability and user rebalancing efforts - underscoring why borrow/lend outperformed perps during the chaos.
Deep Dive into Liquidations
The majority of liquidations occurred in the Main Market ($16M), followed by Fartcoin ($1.7M), JLP ($1.3M), and the Altcoin Market ($666k). SOL long positions dominated, with 58% of seized collateral in SOL and 9.4% in JitoSOL. On the debt side, USDC accounted for 76% of repaid positions, followed by USDG at 9.5%.
These patterns reflect a healthy liquidation flow - anchored by SOL as the most liquid collateral and USDC as the most liquid borrowed asset - minimizing systemic risk during sharp sell-offs.
Only a handful of large accounts accounted for a disproportionate share of liquidations. The top 5 wallets represented 30% of total collateral seized. Just 23 wallets had more than $200k in liquidated collateral, and only 39 exceeded $100k. This highlights the effectiveness of Kamino’s partial liquidation model in preventing over-liquidation. Some users may have even opted to ride out the volatility rather than intervene.
Liquidation activity was distributed across a broad ecosystem of liquidators. A total of 114 participants took part in clearing risky positions. Of these, 4 liquidators each processed more than $1M in seized collateral, and 28 handled over $100k.
This marks a significant increase in participation since the last major liquidation event in April. In total, liquidators earned $260k in fees, 14% less than in April, while handling 16% more collateral. This suggests greater operational efficiency and improved alignment of incentives between protocol safety and cost-effectiveness.
Final Thoughts
Kamino’s risk infrastructure performed robustly under significant stress from the tariff-induced crash - the largest liquidation event in crypto history. The protocol absorbed the shock without incurring any bad debt, and all liquidations were contained to higher-risk accounts and markets. Lending pool solvency remained intact throughout, with Solana’s network proving superior to Ethereum’s in throughput and cost stability.
Dynamic interest rates, efficient liquidation execution, and the growing responsiveness of Kamino’s liquidator network played a critical role in mitigating systemic impact - outperforming CEXs and enabling users with minimal losses. The protocol’s partial liquidation model, combined with adaptive bonuses, proved highly effective in minimizing user losses while ensuring timely position resolution.
This outcome highlights the maturity of its market architecture and its ability to self-correct during turbulence. As the broader crypto market continues to consolidate amid geopolitical risks, Kamino is well-equipped to manage volatility and scale securely into the next phase of growth.
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