Kamino Lend Risk Event Analysis: midday 6th to midday 7th April 2025
Global markets tanked following newly imposed U.S. tariffs. This sell-off propagated to crypto markets, with SOL declining 21% in 24 hours. This triggered $16M of liquidations on Kamino markets - 64% of which was JLP. Liquidations were handled efficiently by the protocol and its ecosystem of 114 liquidators.
Volume surged to $533M as users topped up, rebalanced, repaid debt, and managed risk. Liquidations reached 5.9% of the total volume impacting 6,527 wallets.
For an in-depth look, see the April 6-7th Dashboard.
A global sell-off followed the announcement of new U.S. tariffs, spilling into crypto markets. Prices hit their lowest levels in 2 years, SOL falling under $100 before rebounding. This follows months of consolidation, which have thinned users margins, leading to significant liquidations across DeFi. Still, liquidations were processed efficiently with no bad debt on Kamino.
Volatility on Kamino Assets
Tokens listed on Kamino Lend experienced sharp declines in a short period of just 24 hours. SOL dropped from $120 to $95 and with some altcoins experiencing drawdowns up to 30% drawdowns. On average, Kamino-listed assets lost 16.3% of their value at the peak of the crash.
How Users Responded
Trading activity surged as users actively managed their positions. Total protocol transaction volume over this 24h period reached nearly $533 million, as many users opted to rebalance, repay loans, and reduce exposure.
Liquidation volume reached $31.5 million — including both seized collateral and repaid debt, with 6,527 wallets affected across 14,480 liquidation events. Despite liquidations reaching 6% of total volume, users were actively managing risk with high level of deposits through the volatility.
User activity ensured Kamino’s lending pool solvency, with some suppliers toping up or repaying their positions, while liquidators clearing out the riskiest positions. Ultimately, the protocol’s health improved by the end of the event, as user activity helped reinforce lending pool stability.
Interest rates saw temporary spikes as a reaction to market stress, albeit smaller than in previous risk events. SOL borrow rates briefly surged past 12% APY, and USDG past 10%, making leveraged positions unsustainable. However, borrow costs quickly returned to more typical levels, reflecting the willingness of users to rebalance swiftly.
Deep Dive into Liquidations
Liquidations were concentrated in the JLP & Main markets, with $10.2M and $5.7M of collateral seized respectively. JLP accounted for 64% of all liquidated collateral, followed by SOL. On the debt side, USDC represented 74% of all repaid amounts. These patterns indicate resiliency, as SOL remains the most liquid collateral and USDC the most liquid debt asset, reducing systemic risk during sell-offs.
Large liquidations were relatively rare. Only 21 wallets saw over $100,000 in collateral liquidated, and 47 wallets were liquidated for more than $50,000. This suggests that even users with large positions were actively managing risk, and that Kamino’s partial liquidation model was successful in preventing over-liquidation and unnecessary loss.
Liquidation activity was broadly distributed among the liquidator ecosystem. A total of 114 liquidators participated in the event, with 19 liquidators processing more than $100,000 in seized collateral. This represents a notable increase in participation compared to the last major risk event in February, where only 18 liquidators handled more than $50,000. In total, liquidators earned $303,000 in fees for their role in safeguarding the protocol, while incurring just $1,131 in transaction costs — demonstrating efficient incentive alignment and operational cost-effectiveness.
Check out Allez’s Liquidation Dashboard for a deeper exploration
Final Thoughts
Kamino’s risk architecture proved resilient in the face of severe market stress. The combination of dynamic interest rates, efficient liquidation mechanics, and proactive user behavior preserved lending pool health. No bad debt occurred, and liquidations remained localized to riskier accounts and markets.
The protocol concluded the event with better overall health metrics than at the outset – a testament to its ability to absorb volatility without significant disruption. The partial liquidation model combined with the dynamic liquidation bonus, in particular, helped minimize user losses while safeguarding solvency. As consolidation continues across crypto markets, Kamino remains well-positioned to navigate future shocks with confidence.
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