How Kamino Became Solana's Largest Lending Protocol and What's Next

The DeFi lending landscape on Solana has undergone a remarkable transformation over the past two years, with Kamino Finance emerging as the dominant force in borrowing and lending. In a detailed conversation with Lightspeed podcast host Danny, Kamino co-founder Marius Ciubotariu revealed the protocol's ambitious roadmap, including six major product launches announced at Breakpoint that aim to fundamentally reshape how both retail and institutional users interact with DeFi credit markets.

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The discussion painted a picture of a protocol that has evolved far beyond its original vision, pivoting from a liquidity vault product for stablecoins into a comprehensive lending marketplace that now serves everyone from individual DeFi users to major financial institutions. With announcements spanning fixed-rate borrowing, off-chain collateral support, private credit integration, and a specialized RWA DEX, Kamino is positioning itself as the essential infrastructure layer for the next wave of on-chain finance.

The Origins of Kamino and the FTX Pivot

Kamino's journey to becoming Solana's largest borrow/lend protocol began under circumstances that few would have predicted would lead to such success. Marius, who came from a traditional finance background building exotic derivatives pricing systems in C++, discovered Solana after learning Rust and participating in a hackathon that opened his eyes to the vast opportunities in decentralized finance.

The protocol officially launched on Solana around 2022 as a liquidity vault product specifically designed for stablecoins. The original concept was elegantly simple: take LP tokens as collateral, recognizing the capital efficiency gains that could be achieved by looping highly concentrated stablecoin positions. "At that time, the borrowing costs would have been low. The yield from stablecoin trading would have been high. So it was a good product," Marius explained.

However, the FTX collapse fundamentally altered the landscape. Stablecoins suddenly took a backseat as users lost trust in centralized entities, forcing Kamino to pivot dramatically. The team realized that LP tokens posed smart contract risks that complicated their original model, leading them to focus exclusively on building a robust borrowing and lending platform. This pivot, born from crisis, would ultimately position Kamino to capture the lion's share of Solana's lending market as the ecosystem recovered.

The DeFi Flywheel and the Mall Analogy

When asked about where finance is headed and why everyone claims it's moving on-chain, Marius offered a compelling framework that he called the "mall analogy." Rather than accepting the vague notion that everything will be tokenized simply because it sounds promising, he dug deeper to understand the fundamental economic forces at play.

"If finance currently works in silos, there's more fragmentation, there's less capital efficiency, and there's more capture of the user," Marius explained. "When everything moves to an open system, they can meet each other, they compete with each other, they compete by bringing more assets or more liquidity, they could lower the costs."

The analogy crystallizes around the difference between scattered individual shops versus a gigantic mall where everyone congregates. In the mall model, more counterparties naturally find each other, creating network effects that compound over time. "If enough mass is accumulated, the gravity is just going to be too big to ignore. Or you will do it at your own expense," he noted, pointing to the remarkably cheap borrowing rates on protocols like Aave as evidence that the gravitational pull of on-chain liquidity is already becoming undeniable.

This framework also explains why Kamino sees itself as serving both front-end retail users and back-end infrastructure needs. As a marketplace with two sides—borrowers and lenders—each participant has different requirements and interfaces. The protocol remains intentionally unopinionated about how users engage, whether directly through the native application or through fintechs that integrate Kamino as their underlying yield or credit infrastructure.

The Asset Landscape: From Sol to Tokenized Everything

The conversation turned to what assets will drive the next phase of growth for lending protocols. Historically, Kamino's deposit base has been concentrated in Sol itself, liquid staking tokens, JLP, and stablecoins. But Marius sees a much broader universe of assets coming on-chain.

He identified two primary categories of assets that will matter for borrowing and lending. First are long-term holds—assets people want to own regardless of short-term market conditions. These include tokenized stocks for capturing GDP growth, precious metals like gold for inflation protection, and yield funds for generating returns. The use case here is straightforward: "I just hold it anyway, so I might want to borrow a bit briefly to do something with it."

The second category involves trade positions where users loop assets for yield. These leveraged carry trades depend heavily on the spread between the yield earned and borrowing costs. "Lots of people lost interest when they realized that the carry trade doesn't work if the interest rate spikes," Marius observed, foreshadowing the importance of fixed-rate products.

One particularly interesting example already live on Kamino is Prime, a tokenized deposit into Figure's democratized prime platform. Figure, a publicly listed US company, issues home equity lines of credit (HELOCs). By holding Prime on Kamino, users effectively lend to originators who issue these loans, with the loans eventually getting securitized and sold. "This is a really interesting new use case that is completely decorrelated from crypto," Marius noted, highlighting how Kamino serves as a bridge between traditional credit markets and DeFi liquidity.

Fixed-Rate Borrowing: The Most Anticipated Product

The first and arguably most significant announcement was fixed-rate borrowing with borrowing intents, a product that Marius described as having the easiest pitch he's ever made. "I don't think we even have to question the product market fit of fixed rate borrowing. I think it's—we know it from real world finance that this is something people want. I think it has always been an implementation problem in crypto."

The need for fixed rates stems from multiple use cases. Funds that need to issue loans themselves require guaranteed cost of capital—if they can't know their borrowing rate, their entire trade could turn negative. Yield funds engaging in leveraged carry trades face similar problems when variable rates spike unexpectedly. But the third use case is what excited Marius most: borrowing intents that allow borrowers to become makers rather than takers.

Currently, borrowers in lending pools are always price takers. Whatever the interest rate based on utilization curves, that's what they pay. There's no mechanism to express willingness to pay higher rates for larger or longer-term loans. "You can't place a limit order," Marius explained, drawing the AMM comparison. Borrowing intents change this dynamic fundamentally.

The implementation took over a year to perfect. Early versions based on peer-to-peer lending were scrapped because they didn't scale—the combinatorial explosion problem and fragmented liquidity killed usability. The final design is a hybrid that combines the intent model with pool-based liquidity. "You have intents and they ultimately settle on the pool. So it combines the best of both worlds."

This architecture has profound implications. It removes the need for deep pools of pre-existing liquidity, which has always been the chicken-and-egg problem for new lending markets. Large borrowers who couldn't previously access sufficient liquidity can now express their intents and attract lenders willing to match. Duration can be added to create primitive yield curves on-chain. The entire interest rate discovery mechanism becomes more efficient.

Off-Chain Collateral: Bridging Traditional Custody

Perhaps the most institutional-focused announcement was support for borrowing against off-chain custody collateral. This addresses a fundamental tension in bringing traditional finance participants on-chain: many funds have regulatory requirements or contractual obligations specifying exactly where their assets must be held.

"There's trillions in the real world. And they have constraints. Some of them have literally regulatory constraints about where their assets have to be. It stipulates in the contracts or prospectus they had. So they can't move their assets onto DeFi," Marius explained. Others simply prefer the convenience and customer support that qualified custodians provide.

Yet borrowing on-chain is becoming increasingly attractive due to the liquidity aggregation effects discussed earlier. The solution Kamino developed with its pilot partner, the Solana Company (dealing with digital asset treasury), allows users to keep assets in their preferred custodians while accessing on-chain borrowing.

Following the Breakpoint announcement, Kamino received significant inbound interest from varied sources—not just Bitcoin holders but a diverse range of treasuries and funds. Each custodian requires different customization, making this a complex technical and business development challenge, but the size of potential borrowers justifies the effort. "It's not very different than having some backed asset as collateral," Marius noted, drawing the comparison to existing tokenized collateral models.

Private Credit: Permissionless Access to Off-Chain Demand

Kamino's private credit product represents another bridge between traditional and decentralized finance, but flowing in the opposite direction. Rather than bringing traditional assets on-chain as collateral, this product routes on-chain liquidity to off-chain borrowers.

The example Marius provided involves a hypothetical fund operating under strict regulation in jurisdictions like Switzerland or Liechtenstein, capable of significant origination for Bitcoin-backed loans. Such funds typically require extensive vetting processes for liquidity providers, limiting access. Kamino's solution creates a permissionless liquidity provision mechanism via the blockchain, with intermediate structures ensuring proper compliance while allowing yield to flow back to on-chain depositors.

While full documentation and disclosures weren't yet public at the time of recording, the product essentially enables "borrow demand that lives off-chain that can be satisfied with liquidity from on-chain." This opens Kamino to an entirely new universe of real-world credit demand that doesn't require underlying assets to be tokenized.

The RWA DEX: Solving the Liquidity Bootstrap Problem

Every team bringing real-world assets on-chain faces similar challenges around acquisition, liquidity, and price stability. Kamino's RWA DEX announcement directly addresses the liquidity piece, which often determines whether a tokenized asset succeeds or fails regardless of its fundamental quality.

The problem with current approaches is straightforward. Most tokenized assets rely on liquidity pool buffers—perhaps a million or two million dollars in an AMM pool. When trades move the pool out of range or create price impact, arbitrageurs must step in to restore parity. But until they do, users experience slippage and potentially buy or sell at unfavorable prices.

"There are assets that simply have to trade at a specific price," Marius explained. A fund updating NAV daily shouldn't see its token deviate just because of AMM mechanics. The solution is essentially a prop AMM where the oracle provides the authoritative off-chain price, and trading occurs at that price. If inventory runs out, market makers can replenish, but users never take unnecessary price impact.

This complements Kamino's full product offering for asset issuers. When someone wants to bring an asset to Kamino, they can now get collateral onboarding, a comprehensive information page with disclaimers and term sheet details, a buy button, and deep liquidity without slippage. "The DEX was the missing piece that has been bothering us for a long time," Marius admitted, especially since smaller teams often lack the execution capability to maintain pegs and coordinate with market makers.

Builder Kit: Kamino as Backend Infrastructure

The Kamino Builder Kit formalized something that had been happening organically: integrators were struggling through GitHub repositories as their integration guides. The kit provides proper documentation, examples, and tooling for common integration patterns.

But beyond developer experience improvements, the announcement signals Kamino's explicit positioning as backend infrastructure for fintechs and exchanges. "We never fully officially announced that we want to be this back end for FinTechs and exchanges. It's something we've talked a lot in private with potential clients. But I think this kind of makes it firmly clear that Kamino is there to serve as backend as well."

The demand validation came naturally. Shared materials were forwarded between teams, leading to new client discoveries without active outreach. Several existing integrators had gone through enough pain that formalizing the process became essential.

Yield Markets and PT Tokens

An interesting tangent explored Kamino's relationship with yield markets and specifically pendle-style PT/YT tokens. While acknowledging the growth of products like Pendle and Solana-native protocols like Exponent and Rate X, Marius expressed measured skepticism about certain aspects.

Fixed yield products make sense in theory, but interest rate hedging faces fundamental challenges in crypto. "There's no one interest rate benchmark for the whole industry," he noted, making meaningful hedging difficult. PT tokens for hedging fixed rates were considered during Kamino's implementation but rejected due to bootstrapping complexity—every new maturity requires new liquidity.

That said, Kamino recently brought Pendle's PTUSDA to Solana via a governance proposal. The decision reflected a pragmatic observation about cross-chain dynamics. "The bridges have become good enough or battle tested enough that people no longer stress about the bridging risks." With Ethereum's deeper liquidity creating larger PT token markets, bridging those assets to Solana made more sense than waiting for native markets to scale.

From Solana-native protocols, Kamino continues to list exponent tokens from the beginning and plans to continue. "We like the exponent guys. But if there's an interesting asset somewhere else and bridging is so easy nowadays, then I think we will—whatever makes sense, we'll do."

Competition and the Path to Market Leadership

The conversation addressed the elephant in the room: how does Solana's largest lending protocol compete with behemoths like Aave on Ethereum? Marius acknowledged the Lindy effect that Ethereum protocols have earned through years of battle-testing. "They worked and they earned it."

However, execution speed matters enormously in crypto's unique blend of finance and startups. "More than two years ago Morpho came up with vaults. Aave hasn't shipped vaults yet. Meanwhile, Euler and Kamino have shipped the vaults." Both Aave and Kamino announced fixed-rate products, likely reaching market around similar timeframes—a testament to Kamino's ability to keep pace with the largest players.

The strategy combines traditional finance relationship-building with startup agility. Great products create organic distribution—users become advocates, potentially becoming decision-makers at fintechs who then want to integrate Kamino. "Just by having a good product, people will just know about you and want to work with you. And then you just have to have great people in your team that can open doors."

Marius shared a humbling statistic about internal dynamics: he's personally responsible for perhaps less than 10% of Kamino's revenue. "90% has come from things that someone else in the team suggested and I maybe originally dismissed." This culture of encouraging bottom-up innovation has clearly contributed to the protocol's product breadth.

Timeline and Execution

When pressed on delivery timelines, Marius was characteristically cautious about specific dates while indicating ambitious targets. "Absolutely for sure first quarter—not for sure, I'm not going to hold myself to anything. But we're aiming for really fast releases. This is not a roadmap announcement."

The products announced weren't vaporware—they emerged from real customer development work over the past year. Fixed-rate borrowing took over a year of refinement, with the first implementation completely scrapped. The off-chain collateral solution was built in collaboration with the Solana Company's treasury needs. The RWA DEX addressed pain points surfaced by every tokenizer Kamino worked with.

Token Value Accrual

The conversation touched on the increasingly important topic of token value accrual, a subject that has gained prominence across DeFi as protocols mature. Marius, while emphasizing he doesn't speak for the entire Kamino protocol, offered clear directional guidance.

"We will announce something sooner rather than later about token value accrual. I think it makes complete sense. I agree with everything that people say." He left implementation details—buy-and-burn versus fee sharing versus other mechanisms—as open questions while affirming fundamental alignment with the principle that tokens should accrue value.

The nuance came in acknowledging Kamino's current stage. "We are a startup. We have to get to breakeven revenue and we need to graduate from growth mode. So it almost doesn't matter until we achieve that." This mirrors traditional startup thinking where premature capital returns would reduce growth potential and ultimate outcomes.

The protocol had been intentionally quiet about these topics until recently. "This is my second podcast in two years," Marius revealed, explaining that regulatory uncertainty made it difficult to discuss token mechanics without risking misinterpretation. With the environment improving, Kamino plans increased transparency around token economics.

The Broader Vision for On-Chain Finance

Throughout the conversation, a consistent theme emerged: Kamino's view of itself as infrastructure for the inevitable migration of finance on-chain. The six product announcements aren't random features but deliberate positioning for a world where on-chain liquidity becomes too deep to ignore.

The fixed-rate products serve institutional borrowers who require predictable capital costs. Off-chain collateral support meets regulated entities where they are, enabling participation without requiring full asset migration. Private credit channels on-chain liquidity to real-world borrowers. The RWA DEX reduces friction for asset tokenizers. The Builder Kit empowers fintechs to integrate Kamino as backend infrastructure.

Each piece builds toward the mall analogy vision. More assets create more borrowers who attract more lenders, which enables more assets to be collateralized, deepening liquidity pools, lowering costs, and attracting yet more participants. "If enough mass is accumulated, the gravity is just going to be too big to ignore."

Looking Ahead to 2026

As the discussion concluded, the conversation turned to Kamino's growth expectations heading into 2026. While crypto-native growth within Solana's ecosystem remains important, the emphasis clearly shifted toward capturing flows from the much larger off-chain world.

"In general, EVM is bigger than Solana and tradfi is just so much bigger—not even tradfi but like off-chain crypto is just much bigger. So they all have so much potential to grow than what we're fighting over at the moment."

The product suite announced at Breakpoint positions Kamino at the intersection of these flows. Whether serving as the application layer directly or as infrastructure powering other applications, the protocol aims to be the essential credit marketplace where on-chain and off-chain finance converge.

For Solana specifically, Kamino's growth represents validation of the ecosystem's ability to support sophisticated financial applications. The protocol's emergence as the dominant lending platform demonstrates that Solana can compete not just on speed and cost but on the depth of financial infrastructure available to users and institutions alike.

The Human Element

Beyond the technical announcements and strategic positioning, Marius's reflections on building through the bear market offered perspective on what makes successful crypto teams. The pivot from liquidity vaults to lending wasn't predetermined—it emerged from responding to market conditions and user needs. The willingness to scrap a year's work on fixed-rate implementation when the design didn't scale showed commitment to getting products right rather than shipping prematurely.

The culture of encouraging team members to propose products, even when initially dismissed by leadership, has clearly paid dividends. This humility—combined with the technical sophistication to execute complex financial primitives on-chain—positions Kamino well for whatever the market brings next.

Conclusion

Kamino's six product announcements at Breakpoint represent more than incremental improvements to an existing lending protocol. They signal a comprehensive vision for capturing the massive opportunity as finance migrates on-chain. Fixed-rate borrowing with intents addresses a fundamental gap in DeFi credit markets. Off-chain collateral support and private credit products bridge the gap to traditional finance. The RWA DEX solves practical problems facing every asset tokenizer. The Builder Kit formalizes Kamino's role as essential infrastructure.

The protocol emerged from the FTX collapse through necessity, pivoting from a focused stablecoin product to a general-purpose lending marketplace. That adaptability, combined with execution speed that keeps pace with larger competitors, positions Kamino to capitalize on Solana's continued growth and the broader trend of financial activity moving on-chain.

As Marius concluded, the opportunity set remains enormous. "We're so tiny at the moment. The world is so much bigger." With these product launches targeting Q1 2026, Kamino appears ready to capture a much larger share of that world.

Facts + Figures

• Kamino officially launched on Solana around 2022 as a liquidity vault product for stablecoins before pivoting to become Solana's largest borrow/lend protocol by a wide margin

• The protocol announced six new product launches at Breakpoint: fixed-rate borrowing with borrowing intents, off-chain custody collateral support, private credit, an RWA DEX, and the Kamino Builder Kit

• Global DeFi TVL sits at approximately $100 billion, while off-chain crypto assets total trillions of dollars—representing massive untapped opportunity

• Prime (tokenized deposits into Figure's platform for HELOC origination) represents a new use case on Kamino that is completely decorrelated from crypto market dynamics

• Fixed-rate borrowing implementation took over a year to develop, with the first implementation completely scrapped before arriving at the current hybrid pool-plus-intents design

• The off-chain collateral solution was developed as a pilot with the Solana Company's digital asset treasury, with significant additional inbound interest following the Breakpoint announcement

• Marius revealed this was only his second podcast appearance in two years, citing previous regulatory uncertainty around discussing token-related topics

• According to Marius, he is personally responsible for perhaps less than 10% of Kamino's revenue, with 90% coming from ideas suggested by other team members

• Kamino is targeting Q1 2026 for product releases, though no specific dates were committed

• The protocol recently brought Pendle's PTUSDA to Solana through a governance proposal, reflecting improved bridge security across chains

• Kamino plans to announce token value accrual mechanisms "sooner rather than later" while maintaining focus on achieving breakeven revenue

• Bridges between chains have become sufficiently battle-tested that cross-chain asset movement is now considered low-risk by market participants

• The RWA DEX will function as a prop AMM where oracles provide authoritative off-chain pricing, eliminating slippage for assets with known NAV

Questions Answered

How did Kamino become Solana's largest lending protocol?

Kamino became Solana's largest lending protocol through a combination of strategic pivoting and consistent execution. Originally launched as a liquidity vault product for stablecoins, the FTX collapse forced the team to pivot when users lost trust in centralized stablecoins. Recognizing that LP tokens posed smart contract risks to their original model, they built out a full borrowing and lending platform instead. The team's ability to ship products like vaults ahead of competitors like Aave, combined with a culture encouraging bottom-up innovation where 90% of revenue-generating ideas came from team members rather than leadership, enabled rapid growth through the bear market.

What is fixed-rate borrowing and why does it matter for DeFi?

Fixed-rate borrowing allows users to lock in predetermined interest rates for specific loan durations, solving the uncertainty problem that plagues current variable-rate DeFi lending. This matters for three key use cases: funds that need guaranteed cost of capital to refinance themselves without risk of negative trades, yield farmers engaging in leveraged carry trades where variable rate spikes can destroy returns, and enabling borrowers to become "makers" through borrowing intents rather than always being price takers. Kamino's implementation took over a year to perfect, combining intent-based ordering with pool settlement to avoid the scaling problems of pure peer-to-peer approaches.

How does Kamino's off-chain collateral support work?

Kamino's off-chain collateral support enables users to borrow against assets held in qualified custodians without moving those assets on-chain. This addresses regulatory requirements and contractual obligations that prevent many institutional participants from putting assets directly into DeFi. The solution recognizes that while assets may need to remain in traditional custody, borrowing on-chain is becoming increasingly attractive due to deeper liquidity and lower costs. Each custodian requires different customization, but the pilot with the Solana Company's digital asset treasury demonstrated the concept, generating significant additional inbound interest from treasuries and funds.

What is Kamino's private credit product?

Kamino's private credit product channels on-chain liquidity to off-chain borrowers who have significant origination capability but limited access to capital. For example, a regulated fund in Switzerland or Liechtenstein might be able to issue Bitcoin-backed loans but requires extensive vetting for liquidity providers. Kamino's solution creates permissionless liquidity provision via the blockchain, with intermediate structures ensuring compliance while allowing yield to flow back to on-chain depositors. This opens Kamino to real-world credit demand without requiring underlying assets to be tokenized.

Why is Kamino building an RWA DEX?

Kamino is building an RWA DEX to solve the liquidity bootstrap problem that every tokenized asset issuer faces. Current approaches rely on AMM liquidity pools that create price impact and slippage, causing tokens to trade away from their true value until arbitrageurs restore parity. Kamino's solution functions as a prop AMM where oracles provide authoritative off-chain pricing, and trades execute at that price without slippage. This is especially important for assets with known NAV that shouldn't deviate due to AMM mechanics, and helps smaller issuers who lack resources to maintain pegs and coordinate market makers.

Will Kamino remain a consumer app or become backend infrastructure?

Kamino plans to serve both roles simultaneously. As a marketplace for lenders and borrowers, the protocol remains unopinionated about how users interface with it. Some users prefer direct interaction through the native application, while fintechs and exchanges increasingly integrate Kamino as backend infrastructure for yield generation or credit access. The Kamino Builder Kit announcement formalized this positioning, providing proper documentation and tooling for integrators who had previously struggled through GitHub repositories as their guides.

What assets does Kamino expect to grow on its platform?

Kamino expects growth from two categories of assets: long-term holds and trade positions. Long-term holds include tokenized stocks for GDP growth exposure, precious metals for inflation protection, yield funds, and even pre-IPO assets—things people want to own regardless of short-term market conditions and may want to borrow against occasionally. Trade positions involve assets with clear yields that support leveraged carry trades. Prime tokens representing HELOC origination already demonstrate the potential for assets completely decorrelated from crypto to find product-market fit on Kamino.

When will Kamino's new products launch?

While not committing to specific dates, Marius indicated Kamino is targeting Q1 2026 for the product launches, emphasizing "really fast releases" rather than a distant roadmap announcement. The products emerged from real customer development work and existing technical implementations rather than conceptual ideas, suggesting they're further along the development cycle than typical roadmap items.

Will the Kamino token accrue value?

Kamino plans to announce token value accrual mechanisms "sooner rather than later," with Marius expressing fundamental agreement that tokens should accrue value. However, he emphasized that as a startup, Kamino needs to reach breakeven revenue and graduate from growth mode first, noting that premature capital returns would reduce ultimate outcomes. Specific implementation details—buy-and-burn versus fee sharing versus other mechanisms—remain open questions that will be addressed in future announcements.