A significant market correction hit crypto on February 5-6, 2026. SOL dropped 18% (from $92 to $76), ETH fell 15%, and JLP declined 10%. This triggered a cascade of 55,649 liquidations across Kamino Finance markets, liquidating $19.36M in collateral from 30,030 wallets.
The protocol handled this volatility event cleanly: no bad debt was generated, and all liquidations processed efficiently.
Event Timeline
The sell-off unfolded over 48 hours. SOL fell from $92 to a low of $76 (-18.0%), ETH from $2,148 to $1,832 (-14.7%), and JLP from $3.83 to $3.43 (-10.4%). Start/End prices are the first and last hourly observations within the event period (Feb 5, 00:00 to Feb 6, 23:00 UTC).
Liquidation Timeline
The liquidation cascade followed the price decline closely:
- Feb 5: Initial volatility with 29,185 liquidations and $8.77M seized as SOL broke below $85
- Feb 6: Peak activity with 26,464 liquidations and $10.59M seized as SOL crashed to $76
Peak Activity: February 6, 00:00 UTC saw 26,456 liquidations with $10.59M in collateral seized as SOL crashed through $80.
Liquidation Analysis
By Market
| Market | Liquidations | Collateral Seized |
|---|---|---|
| Main | 44,665 | $12.79M |
| JLP | 10,560 | $6.47M |
| Fartcoin | 67 | $47.0K |
| Bitcoin | 214 | $20.0K |
| JTO | 4 | $12.6K |
The Main market saw the highest count of liquidations (44,665), while the JLP market had significant dollar value seized ($6.47M) despite fewer events.
By Collateral Type
| Collateral | Amount Seized |
|---|---|
| SOL | $6.89M |
| JLP | $6.58M |
| JITOSOL | $2.14M |
| cbBTC | $1.67M |
| xBTC | $825K |
By Correlation Type
Nearly all liquidation volume came from uncorrelated positions (volatile collateral against stablecoin debt), while correlated pairs (LST/SOL, SOL/LST, LST/LST, RWA/stablecoin) saw minimal liquidation activity.
| Correlation | Events | Collateral Seized | % of Total |
|---|---|---|---|
| Uncorrelated | 54,775 | $19.29M | 99.6% |
| Correlated | 874 | $68K | 0.4% |
By Collateral/Debt Pair
| Pair | Events | Collateral Seized |
|---|---|---|
| JLP/USDC | 7,193 | $5.19M |
| SOL/USDC | 27,845 | $4.67M |
| JITOSOL/USDC | 949 | $1.83M |
| cbBTC/USDC | 1,155 | $1.53M |
| SOL/USDT | 5,092 | $892K |
| JLP/PYUSD | 1,353 | $743K |
| SOL/PYUSD | 1,518 | $578K |
| xBTC/USDC | 101 | $546K |
| JLP/USDG | 858 | $331K |
| JLP/USDT | 1,172 | $319K |
USDC was the dominant debt token across all pairs. JLP/USDC and SOL/USDC alone accounted for $9.86M (51%) of total collateral seized.
Post-Event Position Risk
After the event, 19,794 active obligations with debt remain (11,249 uncorrelated, 8,545 correlated). This is the total number of borrowing positions on Kamino with $\ge$ $100 in debt.
DTL (Distance to Liquidation) measures how far each position is from its liquidation threshold. When DTL = 0%, the position gets liquidated.
Distance to Liquidation (DTL)
Uncorrelated Positions (11,249)
| Risk Tier | DTL Range | Volume | % of Total | # Positions |
|---|---|---|---|---|
| Critical | <5% | $336K | 0.1% | 17 |
| Warning | 5-10% | $3.3M | 0.9% | 89 |
| Elevated | 10-15% | $18.9M | 5.3% | 1,259 |
| Monitor | 15-25% | $43.8M | 12.4% | 3,336 |
| Safe | >25% | $287.6M | 81.2% | 6,548 |
Correlated Positions (8,545)
| Risk Tier | DTL Range | Volume | % of Total | # Positions |
|---|---|---|---|---|
| Critical | <1.5% | $85K | 0.0% | 19 |
| Warning | 1.5-4% | $102.6M | 15.8% | 250 |
| Elevated | 4-7% | $273.9M | 42.1% | 1,474 |
| Monitor | 7-10% | $106.5M | 16.4% | 816 |
| Safe | >10% | $166.9M | 25.7% | 5,986 |
Top Critical Positions (by DTL)
| Market | Debt | DTL | Pair | Correlation |
|---|---|---|---|---|
| Main | $213K | 2.6% | SOL/USDT | uncorrelated |
| Main | $77K | 1.1% | SOL/bSOL | correlated |
| Main | $72K | 4.5% | cbBTC/PYUSD | uncorrelated |
| Maple | $30K | 4.8% | syrupUSDC/USD1 | uncorrelated |
| Main | $5.0K | 2.1% | SOL/PYUSD | uncorrelated |
Protocol Health
| Metric | Value |
|---|---|
| Total Supply | $2.70B |
| Total Borrow | $1.00B |
| Active Obligations | 19,794 |
| Bad Debt | $0 |
The protocol remains healthy. No bad debt was generated during this event, demonstrating effective liquidation mechanisms.
Market Supply & Debt Changes During Event
| Market | Supply Start | Supply End | Supply Chg | Borrow Start | Borrow End | Borrow Chg |
|---|---|---|---|---|---|---|
| Main | $1,683M | $1,543M | -8.3% | $658M | $545M | -17.1% |
| Prime | $408M | $463M | +13.5% | $164M | $207M | +25.8% |
| Maple | $298M | $242M | -18.5% | $119M | $90M | -23.9% |
| JLP | $275M | $239M | -13.1% | $95M | $81M | -15.1% |
| Jito | $69M | $66M | -4.0% | $33M | $31M | -5.6% |
| OnRe | $46M | $45M | -1.6% | $13M | $13M | +1.4% |
| Superstate | $16M | $25M | +56.0% | $4M | $8M | +88.8% |
Flight to quality: While most markets contracted during the sell-off, Prime grew by +$55M in supply (+13.5%) and +$42M in borrow (+25.8%). Depositors moved capital from Main and other volatile markets into Prime, which has tighter risk parameters and more conservative collateral. Superstate also grew significantly, reflecting demand for real-world-asset-backed markets during crypto volatility.
Main’s supply trough hit $1,385M (-17.7% from start) before recovering to $1,543M by end of period. Maple saw the steepest sustained decline at -18.5% supply / -23.9% borrow, with limited recovery.
Outlook
- Monitor JLP market: Significant liquidation exposure ($6.47M seized)
- Watch SOL price: Further decline below $70 could trigger additional liquidations from positions in Warning/Elevated DTL tiers
- No immediate action required: Protocol mechanisms functioned correctly, no bad debt generated
Analysis Date: February 7, 2026
Event Period: February 5-6, 2026
Prepared by: Allez Labs