Kamino Finance – Solana’s Ultimate Liquidity Destination
Kamino Finance is Solana’s ultimate liquidity destination, built on DEXs operating concentrated liquidity market makers.
Kamino Finance is on a mission to become Solana’s ultimate liquidity destination. A corner of the DeFi universe where capital efficiency reigns supreme.
Introducing Kamino
Kamino is a tool that automatically rebalances concentrated liquidity (CLMM) positions, auto-compounds rewards, and utilizes advanced proprietary quantitative modeling to fine-tune the protocol’s strategies for capturing value.
Though initially built on Orca’s CLMM Whirlpools, Kamino’s easy-to-use vaults are designed to manage liquidity across multiple next-generation DEXs. Kamino makes it possible for any user to provide liquidity and earn fees from trading with the click of a button.
Why We Need Kamino
Orca’s CLMM Whirlpools currently attract multiple times the 24-hour trade volume. As their counterparts, liquidity pools reliant on the traditional AMM structure.
Orca Traditional AMM pools have $2.7M daily volume, with $61M in TVL.
Whirlpools attract 7x the volume as Orca’s classic AMM pools – with half the liquidity deployed by users ($61M versus $27M).
In contrast, Orca CLMM pools (Whirlpools) are making 7x more daily volume, $14.8M, with half of the LTV of Orca Traditional AMM pools.
This difference in volume demonstrates a massive increase in capital efficiency, but the complexity of setting and managing concentrated liquidity positions has been a barrier to increased adoption.
Furthermore, studies have shown that the impermanent loss (IL) from concentrated liquidity positions often outweighs fees earned by a significant margin, leading to a large proportion of loss-making positions.
Kamino’s strategies aim to protect users from IL and optimize yields earned from fees when providing concentrated liquidity. The image below demonstrates a historical model of Kamino’s performance over a one-month period. Managing the USDC-USDT Whirlpool, and as you can see, Kamino outperforms the estimated APY advertised by Orca.
Concentrated liquidity is an incredibly powerful tool that could propel DEXs to the center stage of global crypto trading. As the decentralized trading environment improves, and as more users are attracted to concentrated liquidity. Kamino will help optimize the fees users can capture while minimizing the risk of Impermanent Loss.
Why Hubble Protocol Incubated Kamino
Hubble Protocol has been building DeFi solutions on Solana for over a year. Incubating Kamino Finance is an extension of Hubble’s mission to improve the capital efficiency and liquidity of the DeFi landscape on Solana, especially for USDH.
Kamino will be doing much more than simplifying life for LPs. Kamino will help provide deep liquidity for USDH. And it will create additional collateral that can be deposited on Hubble via kTokens (Kamino LP tokens). By helping further composability in Solana DeFi. Kamino will also increase opportunities for users to mint USDH and use kTokens independently.
Hubble has always prioritized security above all, and Kamino will be held to the same rigorous standards. By the time Kamino goes live, the protocol’s code will have been submitted to three independent audits on top of multiple tests performed throughout Kamino’s development.
About Kamino
Kamino automatically manages your concentrated liquidity positions. When depositing your tokens, Kamino opens a liquidity pool position on a DEX and does everything for you: rebalancing, auto-compounding, and finding the optimum range for capturing the most trading fees while avoiding impermanent loss (IL).
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