If you have idle assets sitting in your Solana wallet, you are leaving money on the table. Kamino Finance is the largest DeFi protocol on Solana by total value locked, consistently holding between $2-3 billion in TVL. It is the go-to place for lending, borrowing, and earning automated yield on Solana.
Kamino started as a concentrated liquidity vault manager, but it has grown into a full-suite DeFi platform. Today, most users know it for Kamino Lend — a lending and borrowing market that rivals Aave on Ethereum — and for its Earn vaults that automate yield strategies so you don't have to babysit positions.
This guide covers everything you need to know: how lending and borrowing work, what Elevation Mode is, how to use Earn vaults, what the KMNO token does, and what risks to watch out for.
Why Kamino Dominates Solana DeFi
Kamino didn't become the #1 protocol on Solana by accident. A few things set it apart:
- Deep liquidity across markets. Kamino supports SOL, USDC, USDT, JitoSOL, mSOL, bSOL, JupSOL, and many other assets. The lending pools are large enough that you can deposit or borrow significant amounts without major rate impact.
- Institutional-grade risk management. Each market has isolated risk parameters. Kamino uses multiple oracle feeds, configurable liquidation thresholds, and granular borrow caps to keep the protocol healthy.
- Automated strategies. The Earn vaults remove the need to manually manage leveraged positions or concentrated liquidity. Deposit and let the vault handle rebalancing, compounding, and risk management.
- Composability. Kamino's kTokens (receipts you get when you deposit) are accepted as collateral across other Solana protocols, making your capital work harder.
If you are doing anything with DeFi on Solana, you will almost certainly interact with Kamino at some point. You can compare yields across Kamino and other protocols on our yields page.
Kamino Lend V2: How Lending and Borrowing Work
Kamino Lend is the core product. It works like other overcollateralized lending markets: you supply assets to earn interest, and you borrow against your collateral by paying interest.
Supplying Assets
When you supply an asset (say, SOL or USDC), it goes into a lending pool. Borrowers pay interest on what they borrow, and that interest gets distributed to suppliers. Your supply earns yield continuously — no lockups, no minimum deposits.
What you can supply:
| Asset Type | Examples | Typical Supply APY |
|---|
| Stablecoins | USDC, USDT, PYUSD | 4-10% |
| SOL & LSTs | SOL, JitoSOL, mSOL, bSOL, JupSOL | 2-8% |
| Major tokens | ETH, BTC (wBTC) | 1-5% |
| Other | JTO, JUP, HNT | Variable |
Supply rates fluctuate based on utilization — the percentage of the pool that is currently borrowed. Higher utilization means higher rates for suppliers, but also means withdrawals can temporarily be constrained if utilization hits 100%.
Borrowing Assets
To borrow, you first supply collateral. Each asset has a Loan-to-Value (LTV) ratio that determines how much you can borrow against it. For example, if SOL has an 80% LTV and you supply $1,000 worth of SOL, you can borrow up to $800 worth of another asset.
Key borrowing concepts:
- LTV (Loan-to-Value): The maximum percentage you can borrow relative to your collateral value. Typical range: 65-80% depending on the asset.
- Liquidation threshold: The LTV level at which your position becomes eligible for liquidation. This is always higher than the max LTV — giving you a buffer zone.
- Borrow APR: The interest rate you pay on borrowed assets. Varies by utilization and asset.
- Health factor: A number representing how safe your position is. Below 1.0 = eligible for liquidation. Keep it above 1.5 to sleep well at night.
Common borrowing strategies:
- Leverage SOL exposure. Supply SOL, borrow USDC, swap USDC for more SOL on Jupiter. You now have leveraged long exposure to SOL.
- Earn the spread. Supply a high-yield LST like JitoSOL, borrow SOL at a lower rate, and pocket the difference.
- Access liquidity without selling. Need USDC for something but don't want to sell your SOL? Borrow against it.
Elevation Mode (eMode): 95% LTV for Correlated Assets
This is one of Kamino's most powerful features, and it is often overlooked by newer users.
Elevation Mode (eMode) lets you borrow at much higher LTV ratios when your collateral and borrowed asset are highly correlated. The logic: if you supply JitoSOL and borrow SOL, the risk of liquidation is extremely low because both assets move in lockstep. Kamino recognizes this and lets you borrow up to 95% LTV instead of the standard 75-80%.
eMode groups on Kamino:
| eMode Group | Collateral | Borrow | Max LTV |
|---|
| SOL-correlated | JitoSOL, mSOL, bSOL, JupSOL | SOL | Up to 95% |
| Stablecoin | USDC | USDT (or vice versa) | Up to 95% |
Why does this matter? It unlocks capital-efficient strategies:
- LST yield looping. Supply JitoSOL, borrow SOL at 95% LTV, stake the SOL for more JitoSOL, and repeat. You amplify the ~7-8% staking yield to 15-30%+ depending on how many loops you do. The Earn vaults automate this exact strategy.
- Stablecoin yield farming. Supply USDC, borrow USDT at 95% LTV, deploy USDT into another yield opportunity.
eMode positions can still be liquidated — if the peg between correlated assets breaks (e.g., an LST depegs from SOL), your health factor drops fast. But under normal conditions, it is remarkably safe.
Earn Vaults: Automated Yield Strategies
If managing leveraged lending positions and looping sounds like too much work, the Earn vaults handle it for you. You deposit a single asset, and the vault executes a strategy automatically — including rebalancing, compounding, and maintaining a healthy borrow position.
Vault Types
Kamino offers vaults across a risk spectrum:
Conservative vaults focus on stablecoin yield or simple LST looping with low leverage. Target APYs are typically 5-12%. Lower risk, steady returns. Good for capital you don't want to actively manage.
Balanced vaults use moderate leverage on correlated assets. Think JitoSOL/SOL looping at 3-5x effective leverage. Target APYs range from 10-20%. This is the sweet spot for most users.
Aggressive vaults push leverage higher or use less correlated assets. Higher target APYs (20%+), but more exposure to liquidation risk and market volatility. Only for users who understand the downside.
How Auto-Rebalancing Works
Each vault has target parameters: a target leverage ratio, target health factor range, and rebalancing thresholds. When market movements push the position outside these ranges, the vault automatically:
- Adjusts the borrow amount (borrows more or repays some)
- Rebalances collateral to maintain the target leverage
- Compounds earned yield back into the position
You don't need to do anything. Just deposit and withdraw when you want to. The vault handles the rest.
Vault Fees
Kamino charges performance fees on vault profits (typically 10-15% of yield generated). There are no deposit or withdrawal fees. The fees are taken from profits, so you only pay when the vault makes money.
KMNO Token: Staking and Governance
KMNO is Kamino's governance and utility token. Here is what it does:
- Staking. Stake KMNO to earn a share of protocol revenue. Kamino generates fees from borrowing interest and vault performance fees, and a portion flows to KMNO stakers.
- Governance. KMNO holders vote on protocol parameters: risk settings, new markets, fee structures, and protocol upgrades.
- Points multiplier. Staked KMNO boosts your Kamino Points earnings, which have historically translated into additional KMNO distributions.
- Fee discounts. Some vault fee reductions are available to KMNO stakers.
KMNO is available on Jupiter and other Solana DEXs. If you are actively using Kamino, staking KMNO aligns your incentives with the protocol.
Getting Started: Step-by-Step
Here is the fastest path from zero to earning yield on Kamino.
Step 1: Connect Your Wallet
Go to app.kamino.finance and connect your Solana wallet. Kamino works with Phantom, Solflare, and other major Solana wallets.
Make sure you have some SOL for transaction fees (0.01 SOL is more than enough for dozens of transactions on Solana).
Step 2: Choose Your Strategy
Decide what you want to do:
- Just earn yield on what you hold? Go to Kamino Lend, click "Supply", pick your asset, enter an amount, and confirm the transaction. Done. You are now earning interest.
- Want higher yield with automation? Go to Earn vaults, pick a vault that matches your risk tolerance, deposit, and let it run.
- Want to borrow? Supply collateral first (Step 2a), then go to the Borrow tab, select the asset you want to borrow, and confirm.
Step 3: Monitor Your Position
If you are just supplying, there is not much to monitor — your balance grows over time.
If you are borrowing, keep an eye on your health factor. Kamino shows this prominently in the dashboard. Stay above 1.5 for comfort. If SOL drops 20% in a day and your health factor was already at 1.2, you could get liquidated.
For vault positions, the vault manages risk for you, but it is still worth checking periodically that the vault APY matches your expectations.
Step 4: Withdraw Anytime
There are no lockups on Kamino Lend or most Earn vaults. To withdraw:
- Go to your positions
- Click "Withdraw"
- Enter the amount (or click "Max")
- Confirm the transaction
If you have an active borrow, you need to repay it before withdrawing collateral — or at least maintain your health factor above the liquidation threshold.
Risks You Need to Understand
Kamino is a battle-tested protocol, but DeFi is never risk-free. Here is what can go wrong:
Liquidation Risk
If you borrow and the value of your collateral drops (or the value of your borrowed asset rises), your health factor decreases. Below 1.0, liquidators can seize a portion of your collateral to repay your debt. You lose your collateral and still owe the remaining debt.
How to manage it: Don't borrow at max LTV. If the max LTV is 80%, borrow at 50-60% instead. This gives you a large buffer for price drops. Set up alerts or check your health factor regularly.
Smart Contract Risk
Kamino's contracts have been audited multiple times, and the protocol has been live for over two years without a major exploit. But smart contract risk never goes to zero. Don't put your entire net worth into any single DeFi protocol.
Oracle Risk
Kamino uses multiple price feeds to value collateral and determine liquidations. If an oracle provides a bad price (stale data, manipulation), positions could be incorrectly liquidated or, worse, the protocol could accrue bad debt. Kamino mitigates this with redundant oracles and price deviation checks, but the risk exists.
LST Depeg Risk
If you are using eMode with liquid staking tokens like JitoSOL or mSOL, you are betting that the LST maintains its peg to SOL. In a black swan event (validator slashing, protocol exploit), an LST could depeg. At 95% LTV in eMode, even a small depeg can trigger liquidation.
Some Earn vaults that manage concentrated liquidity positions (Kamino's original product) are exposed to impermanent loss. If the price of the underlying assets moves significantly, the vault's value may underperform simply holding the assets. The leveraged lending vaults (JitoSOL/SOL looping) do not have impermanent loss — they are pure borrow/lend strategies.
Kamino vs. Other Solana Lending Protocols
Kamino is not the only lending option on Solana. Drift offers borrow/lend alongside perps, and MarginFi was another option before its issues in 2024. But Kamino leads on:
- TVL and liquidity depth — largest lending pools on Solana
- eMode — no other Solana lending protocol offers 95% LTV for correlated assets at this scale
- Automated vaults — integrated yield automation that others lack
- Risk management — granular per-market parameters, multiple oracle feeds, conservative listing standards
For a broader comparison of yield opportunities across Solana protocols, check our yields page.
Final Thoughts
Kamino is the foundation of Solana DeFi. Whether you want to earn a simple 5% on stablecoins, run leveraged LST yield strategies at 20%+, or just borrow USDC without selling your SOL, Kamino handles it.
Start conservative. Supply a stablecoin or some SOL, see how the rates work, get comfortable with the interface. Then explore eMode and the Earn vaults once you understand the mechanics.
The protocol is not going anywhere — with $2-3B in TVL and deep integrations across the Solana ecosystem, Kamino is as close to essential infrastructure as DeFi gets.
