Kamino experienced impressive growth in January, with total deposits rising by 31% to $3.8B, and borrows increasing by 36% to $1.5B. The Total Value Locked (TVL) reached an all-time high of $2.3B, +28% in January, supported by $10.9B in transaction volume.
Market volatility between January 18-20 led to fluctuations in borrow rates, with SOL market rates spiking to 50%before stabilizing. DeFi Dollar supply rates declined from 9% to 5.7%, while SOL rates rose from 4.9% to 5.5%.
$7.3M in collateral was liquidated in the Altcoin and Main markets, with no liquidations in other markets, demonstrating resilience. The JLP Market remained liquidation-free.
USDC remains the dominant stablecoin, showing strong supply growth but posing potential concentration risks. High leverage demand in SOL markets, interest rate volatility, and liquidation clusters require close monitoring.
🔎 Check out Kamino January 2025 Dashboard for more details
1. Overview of Market Performance
Kamino maintained strong market activity throughout January, with robust deposit growth and active borrowing. Total deposits increased to $3.8B (+31%), while borrowing surged to $1.5B (+36%), leading to a 28% rise in TVL to $2.3B, these metrics are at all-time highs. The $10.9B in total transactions, reflects its expanding ecosystem.
Despite this growth, the number of unique wallets increased only slightly to 134,309 (+0.05%), indicating that while capital inflow is strong, user adoption remains relatively stable. The average transaction volume per user reached $81K, suggesting a highly active existing user base.
January saw increased price volatility compared to December, particularly around January 19-20.
2. Supply/Borrow Trends and Protocol Revenue
The Main market continues to dominate, holding $2.2B in deposits and $934M in borrows. JLP follows with $1.05B in deposits and $343M in borrows, while Jito reached $487M in deposits and $251M in borrows.
JLP and Jito markets experienced notable supply growth, reflecting increased confidence in these segments. However, their higher leverage levels necessitate close monitoring to mitigate risk exposure.
Kamino generated $10.7M in interest revenue from borrowers, with $9.7M distributed to liquidity providers.
3. Kamino Dollar & SOL
The month was characterized by fluctuations in borrow rates, especially in the SOL market, where rates spiked multiple times, reaching up to 60% between January 18-20. The rapid stabilization highlights responsive user behavior and market efficiency.
Demand for SOL-denominated leverage remains high, with 3.6M SOL deposits (+11%) and 3.3M SOL borrows (+13%). Utilization was stable with a slight rise from 90% to 91%, reflecting strong borrower demand. SOL deposit rates improved from 4.9% to 5.5%, indicating sustained borrowing interest in SOL-denominated assets.
The Kamino Dollar supply increased by 33% MoM to $813M, while borrows grew by 25% to $668M. Despite this expansion, stablecoin utilization declined from 88% to 81%, signalling deleveraging trends. DeFi Dollar supply rates declined from 9% to 5.7%, reflecting this relative reduction in demand.
USDC saw the largest growth in both supply and borrowing, reinforcing its role as the dominant stablecoin.
4. Transaction Volume and User Behavior
Kamino’s total transaction volume reached $10.8B with a net positive flow, of $4.2B in deposits versus $3.2B in withdrawals.
The global utilization rate grew from 38% to 40%, indicating higher leverage. Borrowing hit record levels, with $1.5B borrowed and $1.3B repaid, signalling sustained leverage demand.
The Main market continues to dominate, followed by JLP and Jito, reinforcing their significance within Kamino’s ecosystem.
5. Liquidations and Risk Events
The protocol saw $7.3M in liquidations in the Altcoin and Main markets, mostly SOL ($5.5M) and Altcoin longs, with spikes on January 13, 19, and 20.
A deeper analysis of distance-to-liquidation metrics reveals that 60% of Jito’s liquidity is within 10% of liquidation, allowed by the correlation of supply and debt asset, demonstrating a high appetite for xSOL/SOL leverage.
The Main, JLP, and Altcoin markets have heavier-tailed liquidation distributions, making them more resilient to minor fluctuations but vulnerable to cascading liquidations in severe downturns.
In case of market shock, the largest exposures —USDC and SOL— would likely be repaid first in a liquidation scenario, they are also most liquid assets able to sustain large transactions with small price impact.
Meanwhile Jito and JLP markets, hold concentrated high-risk positions, which could amplify cascading failures, necessitating enhanced risk management strategies.
6. Stress Testing
Total Collateral at Risk & Bad Debt Exposure (ceteris paribus):
- In a -30% market event, $457M would be liquidated, potentially resulting in $2.2M in bad debt.
- In a -60% market event, $1B would be liquidated, with bad debt rising to $168M.
7. Conclusions & Risk Considerations
Kamino’s continued growth and increased borrowing demand pushed the protocol to all-time high levels of liquidity alongside higher systemic risks.
- High utilization across stablecoins and SOL markets presents potential liquidity risks during rapid market downturns.
- Stablecoin concentration in USDC increases protocol dependency on a single asset, necessitating diversification strategies.
- Interest rate fluctuations across markets highlight different risk level offering potential arbitrage opportunities.