Solana Foundation Mediates Lending Protocol Dispute as Ecosystem Matures

The Solana ecosystem is undergoing a significant stress test in its rapidly growing $5 billion lending sector, marked by a public dispute between two major protocols, Kamino Finance and Jupiter Lend. The conflict, centered on risk disclosure and collateral practices, escalated to the point where Solana Foundation President Lily Liu was compelled to intervene. This incident highlights the growing pains of a maturing DeFi landscape on Solana, where the breakneck pace of innovation and user adoption is now colliding with essential questions of transparency, risk management, and collaborative governance. While not directly impacting Solana's (SOL) technical performance or network security, the public spat poses a credibility challenge for the sector. The Foundation's call for protocols to prioritize ecosystem health over public disagreements underscores a critical phase in Solana's development: moving from pure growth to sustainable, trusted financial infrastructure. The outcome of this mediation and the subsequent actions of the involved protocols will be closely watched as a bellwether for the maturity and resilience of Solana's DeFi ecosystem heading into 2026.

Solana Foundation Mediates Kamino-Jupiter Lend Dispute as Lending Sector Tensions Rise

Solana's $5 billion lending market faces a public credibility test as Kamino Finance and Jupiter Lend engage in a heated dispute over risk disclosure practices. solana Foundation President Lily Liu intervened, urging both protocols to prioritize ecosystem growth over public sparring.

Jupiter Lend's rapid expansion has drawn scrutiny from competitors regarding collateral reuse and risk transparency. Kamino alleges Jupiter misrepresented vault isolation safeguards, exposing users to undisclosed looping strategy risks. The conflict escalated when Kamino blocked Jupiter's migration tool pending clearer risk communication.

The foundation emphasized Solana's lending sector remains dwarfed by Ethereum's $50 billion market and traditional finance counterparts. This confrontation highlights growing pains in Solana's DeFi evolution as protocols balance competition with collective ecosystem trust.

Upbit Freezes $1.77M in Stolen Assets Amid Expanding Hack Investigation

Upbit, South Korea's largest cryptocurrency exchange, has frozen $1.77 million in stolen assets following a security breach that saw $38 million in Solana-based tokens siphoned off. The hack, one of the largest in Upbit's history, triggered a temporary lockdown and a complete wallet system overhaul.

The exchange's OTS tracking system now monitors stolen assets around the clock, enabling rapid freezing of suspicious transactions. Upbit has also launched a 10% bounty program for recovery assistance, while assuring users that corporate reserves covered the $26.2 million loss.

Jupiter and Kamino Escalate Public Dispute Over Lending Tools

The rivalry between Kamino and Jupiter has intensified, evolving from competitive jostling to an open clash. The conflict began on November 27 when Jupiter Lend launched a refinancing tool designed to migrate Leveraged positions from Kamino Multiply with a single click. The tool executed an atomic transaction involving debt repayment, collateral withdrawal, asset transfer, and position recreation on Jupiter Lend.

Kamino responded on December 2 by updating its smart contracts to block Jupiter’s program, framing the MOVE as a protective measure. Jupiter and Fluid—Jup Lend’s backend provider—accused Kamino of violating open-finance principles. Kamino’s co-founder later defended the decision, citing Jupiter’s misleading claims about collateral isolation, which Fluid’s team acknowledged as inaccurate.

Despite the blockade, Kamino emphasized users could still manually migrate funds. The dispute underscores growing tensions in DeFi’s lending markets as protocols vie for dominance.

Solana Holds Key Support Amid Tightening Liquidity Conditions

Solana (SOL) clings to the $138 support level despite mounting liquidity pressures. Glassnode's profit-to-loss ratio, lingering below 1 since mid-November, signals accelerated loss realization among holders. This metric typically indicates weakening market confidence during bearish phases.

The cryptocurrency now faces a critical juncture between $134.37 and $138.12 support. While not yet signaling a long-term downtrend, the shrinking profit-taking activity leaves SOL vulnerable to exaggerated price swings. Market observers note the absence of sustained buying pressure typically required to break range-bound conditions.

Analyst More crypto underscores the significance of this liquidity squeeze, drawing parallels to historical consolidation patterns preceding major breakouts or breakdowns. The coming sessions will test whether Solana's ecosystem strength can offset these macroeconomic headwinds.