Solana Foundation Chief Steps In as Kamino-Jupiter Lending Feud Escalates

Solana's top brass is stepping into the ring. The foundation's chief just intervened as a public spat between two of the ecosystem's biggest DeFi protocols—Kamino Finance and Jupiter Exchange—turns ugly over lending terms and liquidity.

The Heart of the Beef

It's a classic crypto clash: protocol versus aggregator. Kamino, a leading lending platform on Solana, made a move that directly undercut Jupiter's flagship lending product. The change? Kamino slashed borrowing costs for its own native token, making it cheaper to leverage than going through Jupiter's aggregated service. Jupiter's team cried foul, arguing it threatened a key revenue stream and the stability of their pooled liquidity.

Foundation Plays Referee

Enter the Solana Foundation. Its leadership didn't just watch from the sidelines. They've now initiated direct talks between the teams, pushing for a compromise that keeps the ecosystem's growth—and its fragile reputation for cooperation—intact. The message is clear: internal wars that scare off users and TVL are bad for business.

Why This Feud Matters

This isn't just protocol drama. It's a stress test for Solana's entire DeFi narrative. The chain sold itself on speed and low fees, but its real magic was supposed to be 'composability'—apps working seamlessly together. When major players start fighting over fees and cannibalizing each other's products, that story cracks. Users get caught in the crossfire, and developers wonder if building there means constantly watching their back.

A Cynical Take

Let's be real—this is finance with a blockchain wrapper. The lofty ideals of decentralized cooperation always crash into the same old incentives: capture fees, control liquidity, and dominate the market. The 'foundation' stepping in is less about idealism and more about damage control for the brand. After all, nothing tanks a token's price faster than partners acting like, well, traditional finance rivals.

The pressure's on. If Solana's leaders can't broker a truce here, it signals deeper fragmentation. But if they pull it off, they might just prove a decentralized ecosystem can actually play nice—or at least fake it well enough to keep the money flowing.

Solana Foundation’s president does not mind the competition

Lily Liu, president of the solana Foundation, referenced the current valuation of Solana’s lending market in her post.

That gap is what is fueling the competitive landscape in Solana’s lending sector. While it has led to rapid innovation, tensions have been rising between protocols vying for dominance.

“Hey @kamino @jup_lend, Love you both,” she wrote. “…We can snipe at one another (one click lending position conversion; dunking on sloppy remarks; etc) or we can focus on capturing market share from all of crypto and then Tradfi beyond that.”

As the Solana Foundation executive is concerned, competition has always been healthy for the space, but it is crucial not to lose sight of the main goal, which is capturing more market share from ethereum and TradFi.

Why are Kamino Finance and Jupiter Lend feuding?

Jupiter Lend had had to contend with accusations that the protocol misled users about the platform’s risk isolation and rehypothecation practices, with critics (mostly founders from rival protocols like Kamino and Fluid) claiming that Jupiter Lend falsely advertised its vaults as completely isolated, an act that could potentially expose the broader DeFi space to contagion during market stress.

While Kash Dhanda, Jupiter Lend’s co-founder, admitted that the initial “zero contagion” assertion was not 100% accurate, the executive insisted that rehypothecation occurs to generate yields on collateral, but the risk remains limited and contained at the asset level.

As far as Kamino’s founder, Marius is concerned, Jupiter Lend’s vaults enable full inter-asset exposure that could undermine confidence in the entire Solana DeFi ecosystem. The executive has publicly criticized Dhanda’s Jupiter Lend for “misleading users.”

Fluid’s founder Samyak Jain pointed out that the platform’s vaults actually reuse user collateral for yield optimization, contradicting the notion of full isolation.

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