Kamino Finance has set a mission to become the ultimate liquidity destination for Solana ($SOL). The project aims to revolutionize the way liquidity providers (LPs) can provide concentrated liquidity by making it as easy as pressing a button.
The DeFi community on Solana Kamino’s vaults reached their maximum deposit limits within minutes after launch, and the platform’s total value locked (TVL) hit $1 million on day one.
How Kamino Improves the DeFi User Experience
Launched at the start of September, Kamino Finance is a first-of-its-kind decentralized finance platform on the Solana blockchain. Built atop decentralized exchanges (DEXs) that make use of concentrated liquidity market makers (CLMMs) to facilitate trade, Kamino Finance optimizes yield and automates strategies for users providing concentrated liquidity.
While Kamino is not a CLMM in itself, it acts as a frontend for CLMMs by simplifying the liquidity provision process for LPs and increasing the capital efficiency of their positions.To reap the benefits of Kamino’s services, users simply need to deposit funds into one of Kamino’s vaults, and the protocol will automatically manage their liquidity positions.
In addition to providing automated management, Kamino’s strategies are informed by advanced quantitative modeling that ensures liquidity positions are optimized to capture fees.
Kamino Improves Capital Efficiency for LPs & More
Recent studies have shown that impermanent loss (IL) from concentrated liquidity positions oftentimes outweighs the fees earned by LPs. Kamino’s strategies aim to increase the capital efficiency and reduce users’ exposure to losses due to the complexity of maintaining CLMM positions.
Users who want to earn yield from providing liquidity no longer have to think twice about what they are getting into as an LP on a CLMM. By attracting new users to the liquidity provision side of a DEX, Kamino also represents a major upshot in DEX performance for trading.
Crypto traders who execute token swaps on DEXs with Kamino managed liquidity will find serious improvements. As Kamino automatically helps concentrate tokens around current market values, the price impacts that usually affect most swaps on a DEX are negated by deep liquidity.
Kamino Finance was incubated by Hubble Protocol, a stablecoin platform that allows users to mint USDH against the value of their deposited collateral. With USDH, the DeFi community can earn yield across the Solana ecosystem in various ways.
USDH is currently the number one Solana-native stablecoin for DEX liquidity pairs, bested only by Circle’s USDC Coin (USDC). In the future, and as the protocol grows, Kamino will significantly increase the adoption of USDH used in liquidity pairs on CLMM DEXs.
Kamino could also have an effect on increasing the amount of USDH in circulation. LPs on Kamino can use their kTokens, a fungible LP token representing a deposit, as collateral on Hubble to borrow USDH.
Leading by Innovation
Kamino takes full advantage of the speed and low cost of Solana to bring to life DeFi solutions that aren’t possible elsewhere..Kamino remains one of the very few protocols in the DeFi ecosystem that enables users to earn real yield (as opposed to inflationary yield) through passive strategies like providing liquidity.
As the bear market continues to drag on, Kamino gives stablecoin holders an opportunity to make the most of their assets. allowing users to deposit their stablecoins in a Kamino vault and earn juicy annual percentage yields instead of HODLing, Kamino gives anyone a chance to seek gains when they’ve dried up across the market.
As the DeFi markets continue to mature, with the ecosystem becoming more complicated for less tech-savvy and financially educated users, Kamino Finance is dedicated to innovating the future of DeFi for the world. Kamino makes it easy for anyone to join the DeFi movement and enjoy the life-changing possibilities.