© 2026 The DeFi Report. All Rights Reserved.
Hello readers,
It’s been truly humbling to hear how so many of you have benefited from our research and market insights lately. The best businesses create far more value than they capture by creating win/wins and delivering exceptional service.
We are not perfect. But that’s been our goal from day one at The DeFi Report.
Given that we’re now shifting to a risk-on posture, we want to give something back. We’re currently offering 1 month of TDR Pro free for those ready to lock in.
Pro Members get:
Access to our data-driven research and "cycle awareness" reports.
Access to The Watch List research, data dashboards + price targets.
Access to our portfolio + email alerts when we make changes.
If you’re interested, you can sign up here.
Back to business.
In this week’s edition of The Watch List, we cover Kamino Finance — the leading DeFi money market application within the Solana network.
Disclaimer: Views expressed are the author’s personal views and should not be relied upon as investment advice.
Let’s go.
Kamino launched on Solana in August of ‘22 (after rebranding from Hubble Protocol in the aftermath of FTX). We believe the team is based out of the UK/remote and headed by Marius George Ciubotariu — who previously worked as a Senior Software Engineer at Bloomberg.
Per LinkedIn, the team consists of 11 associated members (quite lean).
Kamino has raised $18.6m across three rounds. Notable investors include Multicoin Capital, Dephi Ventures, ParaFi Capital, DeFiance Capital, CMS Holdings, and Alliance DAO.
@kamino X account: 159k followers
Discord Members: 30.4k
Kamino Finance generates revenue through two primary categories tied to its core products:
Lending/Borrowing Markets: The Kamino protocol takes a % of the interest that borrowers pay to lenders to access capital. Protocol fees typically range from 11-20% depending on the market. It also takes a 50bps loan origination fee on some markets.
Automated Liquidity Vaults: In addition to the lend/borrow product, Kamino allows users to deposit into liquidity vaults for concentrated AMM positions on Solana DEXs. This allows Kamino liquidity providers to accrue AMM fees and use those positions as collateral in the lend/borrow product, increasing capital efficiency. The protocol charges a fee on DEX trades, with LPs capturing most of those fees. Over the last 365 days, Kamino earned $1.9m from its liquidity vaults.
There are currently 26 borrow markets on Kamino, with borrow rates ranging from 2.57% (PYUSD market) to 5% (SOL market). Since launching in April of ‘22, Kamino has generated:
126k loans
$962m of loans
Received $2.6b of user deposits
Kamino users can deposit SOL, stablecoins, and other assets into curated lending vaults to earn automated, optimized lending yields. Funds are deployed and rebalanced across lending markets in accordance with a mandated risk profile (Conservative, Balanced, or Aggressive). These vaults are managed by professional risk curators, including MEV Capital, Allez Labs, RE7, and Steakhouse.
In addition to its core lending products, Kamino has introduced complementary products, including Swap, Multiply, Earn, and Leverage. When you add it all up, it appears the vision is to build on its emerging trust and liquidity moats into a more of a DeFi “superapp” on Solana.
There are roughly $27b in active loans in DeFi, down from a peak of roughly $38.5b.
Kamino currently controls the Solana market but has only a 2.6% market share across all of crypto.
The key questions we think investors should be asking:
Will DeFi continue to expand on Solana? And will Kamino continue to dominate the lend/borrow market on the network while adding to its product suite? We think the answer to #1 is yes. We address #2 in the competition section later in the report.
How might Fintech firms integrate with protocols like Kamino? And what might those business models look like?
The second question is more interesting, and it’s where the addressable market for a protocol like Kamino can expand broadly. This is where the “DeFi Mullet” story comes in: Fintech in the front, DeFi in the back.
For example, “Buy Now Pay Later” is becoming a significant market, especially among young people (estimated $560b in purchase volume in ‘25). The way the model works today:
Customers can choose to buy consumer items in installments and pay 0% interest.
The merchant pays a fee to BNPL companies like Affirm to execute this on their behalf (because it increases their sales).
Affirm pays the merchant and creates a loan (via its balance sheet and/or banking partners) between itself and the customer.
The customer pays the loan to Affirm (not the merchant — they get paid immediately, less Affirm’s fee).
Now. Imagine this. Affirms product doesn’t change at all at the user interface layer. But instead of financing loans themselves or through banks, they tap a protocol like Kamino at the funding layer (invisibly to the user — this is the “DeFi mullet” in the back end).
Affirm’s receivables are pooled into an SPV.
The SPV issues a tokenized senior claim on the cash flows (paid from BNPL payments).
That token could then be used by Affirm in Kamino as collateral to borrow stablecoins to fund future loans (acting as a “warehouse credit line”).
Affirm converts the stablecoin loan to fiat (funding capacity for new BNPL loans)
The key idea here is that Affirm uses its receivables to fund new loans. Therefore, tokenizing their receivables as collateral could create:
Diversified funding sources within DeFi.
Reduced reliance on bank balance sheets.
Potentially cheaper loans in risk-off crypto markets.
Global, 24/7, composable, programmable access to loans.
Within this structure, Affirm still underwrites and services the loan with the customer. It would also be the first to bear any losses if the loan is not repaid. Meanwhile, neither the customer nor the merchant ever touches crypto.
DeFi simply becomes a new funding source that Affirm can “plug into.”
We think this is the future of DeFi lend/borrow applications. There are certainly still some moving pieces/friction to be resolved around SPVs, tokenization of receivables, and whether the rates on protocols like Kamino will be low enough to be economically viable.
It all just needs to work seamlessly — which is not the case today. But with this type of structure, the utility of DeFi protocols such as Kamino can be realized in the market without customers or merchants “touching crypto.”
Given the anticipated growth of the BNPL model (estimated to be trillions by 2030), this is something to keep an eye on.
Performance:
365-day fees: $101.6m
365-day protocol revenue: $22.8m
Peak fees/day: $333k
Avg. fees/day last 30 days: $188k (down 43%)
More on how Kamino compares to Aave (the market leader) later in the report.
The Kamino protocol currently has roughly $1.8b of assets under management/TVL, with about 39% utilization in active loans (below).
For reference, Aave currently has over $50b of TVL and $21b Active Loans (42% utilization). Morpho has $8.8b of TVL and $3.5b active loans (40% utilization).
Active loans exploded on Kamino in 2024 and into 2025, peaking at $1.4b in September of last year. Today, there are roughly $700m of active loans on the protocol (down 50%). Roughly 60% of collateral posted is SOL and USDC.
With $1.4b of active loans, Kamino was generating about $330m in fees/day and $56k of protocol revenue/day. Of course, investors should expect both loan demand and borrowing rates to decline sharply during a crypto winter.
Performance:
Last 30 days: 2k/day
Peak: 11k/day
These figures may seem quite low, but they are in line with what we would expect, as a small subset of users drives most lending activity in DeFi. For reference, Aave has roughly 8k active addresses/day, and Morpho has roughly 2k currently.
Max Supply: 10 billion tokens
Circulating Supply: 3.86 billion (38.6%)
Investors & Advisors: 35%. Unlocks began in May of 2025, with 43% fully unlocked. Vesting continues through April of 2027 with 145.8m tokens unlocking per month ($4.2m/month at the current price of $0.0287).
Core Contributors: 20%. Unlocks began in May of 2025, with 42% unlocked. Vesting continues through April of 2027 with 83m tokens unlocking per month ($2.4m/month at the current price of $0.0287).
Community & Grants: 18.5%. These tokens were fully unlocked in April of ‘24.
Liquidity & Treasury: 10%. These tokens were fully unlocked in April of ‘24.
Genensis Community Allocation: 7.5%. These tokens were fully unlocked in April of 2024.
Season Two Community Allocation: 3.5%. These tokens were fully unlocked in August of 2024.
Season Three Community Allocation: 3.5%. These tokens were fully unlocked in May of 2025.
Season Four Community Allocation: 1%. These tokens were fully unlocked in November of 2025.
Season Five Community Allocation: 1%. These tokens will fully unlock this month.
Please note that while the community and grants tokens are fully unlocked, the protocol has not yet put them all into circulation.
In total, there are roughly $6.6m of token unlocks per month (at current prices) from the core team and investors through April of 2027.
The protocol currently lacks a buyback or burn mechanism to reduce the circulating supply of KMNO.
Kamino is well-positioned to become the dominant lending/borrowing app on the Solana Network. Right now, it’s a two-protocol race between Kamino and JUP Lend ($579m in active loans).
Meanwhile, Kamino currently has 24x the TVL of its closest pure-play lending/borrowing app competitor on Solana (MarginFi).
When we expand the market to Ethereum, Aave is far and away the market leader. Comparing the two protocols, we find that Kamino currently has:
3.6% of Aave’s TVL.
3.3% of Aave’s active loans.
23% of Aave’s daily active addresses.
7.7% of Aave’s total daily fees.
16.8% of Aave’s fully diluted market value.
365-day protocol revenue: $22.8m
365-day Price to Sales: 12.x (fully diluted)
For reference, Aave currently trades at a fully diluted price-to-sales ratio of 16.8x.
Takeaway: On a relative basis, KMNO is cheaper (higher risk/reward) than the market leader, Aave.
High take rates. As Jeff Bezos says, “Your margin is my opportunity.” So those rates should come down as competition increases. For reference, Aave’s protocol revenue was 12% of total fees over the last 365 days. Kamino’s was 18%.
As DeFi protocols mature, we’re seeing a race to build the “full suite of services.” It’s no longer enough to occupy a niche, because DeFi infrastructure is essentially a commodity. A competitor who owns the user can easily spin up the necessary infrastructure and cut out its competition. As such, protocols like Kamino need to 1) execute on building great products, and 2) develop sticky relationships with users.
The KMNO token. $6m of unlocks/month is nothing to scoff at for a small-cap token that trades just $10m in volume per day during a bear market. Investor and team unlocks won’t end until April of ‘27.
DeFi protocols produce more revenue than Layer 1 blockchains, but represent less than 5% of the total crypto market cap (L1’s are roughly 77%). That may surprise you, but it’s always been this way.
Why?
DeFi protocols have historically struggled with:
Governance. Most protocols are centralized, with DAO “governance” mostly a box-checking exercise.
Monetization. Most business models involve two-sided markets in which supply-side users capture the lion’s share of revenue.
Token Economics. Sound models with value accrual mechanisms for tokenholders have been hard to come by (in some cases due to regulatory enforcement under Gensler). The recent strength in HYPE indicates investor preference for projects with clean token economics. Given that there is no value accrual to KMNO (dividends, buybacks, burns, etc), this could be a headwind for the token (especially given the forthcoming unlocks).
Lack of regulation and the ability to integrate with TradFi.
That said, forthcoming regulations could usher in a new era for DeFi protocols. Expanding the utility of DeFi to Fintech firms could create an interesting win/win — where fintechs can easily tap into composable, programmable, 24/7 markets without their users touching crypto infrastructure. The key question for DeFi protocols is what their business model looks like at the infra layer if they are not controlling the UX/interface layer.
Today, Kamino is the leading lend/borrow application on Solana, which has the second-largest DeFi market in crypto. As we’ve seen with Aave on Ethereum, trust and lindy effects flat out matter. This, in our opinion, is what created Aave’s liquidity moat.
The more trusted and reliable you are, the more defensible your business model becomes. This is the game Kamino is playing for today. We think their track record and reputation could give them an edge in retaining users and liquidity through a bear market.
If that’s the case, KMNO could present an interesting opportunity for investors.
That’s why it’s on The Watch List.
If you’d like to receive an email alert if/when we add KMNO (or any other crypto asset) to our active portfolio, you can sign up for TDR Pro (30-day free trial) here.
Take a Report.
And Stay Curious.
Disclaimer: Individuals have unique circumstances, goals, and risk tolerances, so you should consult a certified investment professional and/or do your own diligence before making investment decisions. The author is not an investment advisor and may hold positions in the assets covered. Certified professionals can provide individualized investment advice tailored to your unique situation. This research report is for general educational purposes only, is not individualized, and as such should not be construed as investment advice. The content contained in the report is derived from both publicly available information as well as proprietary data sources. All information presented and sources are believed to be reliable as of the date first published. Any opinions expressed in the report are based on the information cited herein as of the date of the publication. Although The DeFi Report and the author believe the information presented is substantially accurate in all material respects and does not omit to state material facts necessary to make the statements herein not misleading, all information and materials in the report are provided on an “as is” and “as available” basis, without warranty or condition of any kind either expressed or implied.