Kamino is re-engineering Solana’s credit markets by replacing rigid interest rate curves with "borrow intents" and fixed-rate primitives, aiming to capture the trillions in TradFi capital currently trapped in qualified custody.
1. ANALYSIS & TRANSCRIPTION CHECK
Phonetic & Contextual Corrections:
- "TRFI" corrected to TradFi (Traditional Finance).
- "Salana" corrected to Solana.
- "Helocks" corrected to HELOCs (Home Equity Lines of Credit).
- "Lindy" corrected to Lindy Effect (The idea that the future life expectancy of a technology is proportional to its current age).
- "A a" corrected to Aave.
- "Oiler" corrected to Euler.
- "Footer key" corrected to Futarchy (A form of governance where prediction markets decide policies).
- "Propm" corrected to Prop AMM (Proportional Automated Market Maker).
Critical Themes:
- Liquidity Aggregation: The transition from fragmented financial silos to a unified on-chain "mall" model.
- Fixed-Income Primitives: The introduction of fixed-rate borrowing and "borrow intents" to stabilize cost of capital.
- Institutional Rails: Bridging off-chain custodied assets with on-chain liquidity via private credit and RWA (Real World Asset) infrastructure.
- Protocol Evolution: Kamino’s shift from a consumer-facing app to a foundational backend for FinTech and institutional treasuries.
2. THE SHOW NOTES
1️⃣ The Hook
Kamino is re-engineering Solana’s credit markets by replacing rigid interest rate curves with "borrow intents" and fixed-rate primitives, aiming to capture the trillions in TradFi capital currently trapped in qualified custody.
2️⃣ Chronological Deep Dives
The "Mall" Theory of On-Chain Finance
Marius Ciubotariu argues that the migration of finance to the blockchain is driven by capital efficiency rather than mere speculation. He posits that decentralized finance (DeFi) functions as a massive liquidity aggregator that outperforms fragmented traditional systems.
- Finance currently operates in isolated silos, leading to high user capture and low capital efficiency.
- On-chain systems allow counterparties to meet in a single, open environment, driving down costs through direct competition.
- The "Gravity" effect: Once a protocol reaches critical mass, the cost of borrowing becomes so low that ignoring the blockchain becomes a competitive disadvantage.
- “The analogy would be you have like a few shops here and there or you have a gigantic mall where everyone comes.” — Marius Ciubotariu
The Tokenization of Everything
The conversation shifts to the future of asset types on Solana, moving beyond native tokens to encompass the entire spectrum of global wealth.
- Kamino views the market in two categories: long-term holds (stocks, gold, tech) and yield-generating trades (looping).
- Prime (a tokenized deposit platform by Figure) currently allows users to lend to originators of HELOCs (Home Equity Lines of Credit), providing a yield source uncorrelated with crypto volatility.
- Tokenized wrappers for private credit funds and Apollo’s credit fund are already live on Kamino, signaling the end of the "crypto-only" collateral era.
- “I think eventually everything will get tokenized. The market is just too big to ignore.” — Marius Ciubotariu
Fixed Rates and the Death of the Utilization Curve
Marius details why traditional DeFi lending models—based on utilization curves—fail sophisticated borrowers who require predictable costs.
- Kamino is launching fixed-rate, fixed-term borrowing to support "carry trades" (borrowing at a low rate to invest in a higher-yielding asset) where interest rate spikes would otherwise wipe out margins.
- Borrow Intents introduce a limit-order logic to lending; borrowers can specify the maximum rate they are willing to pay, effectively becoming "market makers" for credit.
- The protocol uses a hybrid model that settles intents against a liquidity pool, avoiding the scalability issues of pure peer-to-peer lending.
- “Borrow intent will allow borrowers to be makers... the curve is kind of out of the equation and you allow price discovery of interest rates to happen.” — Marius Ciubotariu
Institutional Bridges: Off-Chain Collateral and Private Credit
A major bottleneck for institutional DeFi adoption is the requirement for assets to remain in qualified custody. Kamino’s new suite addresses this regulatory and security constraint.
- Kamino now enables borrowing against collateral held in off-chain custodians, allowing entities like the Solana Foundation’s digital treasury to access liquidity without moving assets into a hot wallet.
- The Private Credit product creates a permissionless layer for on-chain liquidity to flow into regulated off-chain funds in jurisdictions like Switzerland or Liechtenstein.
- This architecture targets the "off-chain crypto" market, which remains significantly larger than the current DeFi ecosystem.
- “Some people still have to live in qualified custodians... but it's cheaper to borrow on chain because lots of liquidity is migrating on chain.” — Marius Ciubotariu
The RWA DEX and the Build Kit Strategy
To support the liquidation and trading of Real World Assets (RWAs), Kamino is launching a specialized exchange and an integration suite for third-party developers.
- The RWA DEX utilizes a Prop AMM (Proportional Automated Market Maker) design to ensure assets trade at their Net Asset Value (NAV) without the price impact typical of standard AMMs.
- The Kamino Build Kit provides a standardized way for FinTechs and exchanges to embed Kamino’s lending and yield products directly into their own interfaces.
- This "Backend-as-a-Service" approach positions Kamino to capture volume from users who may never visit the Kamino website.
- “The DEX was the missing piece... it trades at that price and if it runs out of inventory, the market maker fills it, but at least people don't have to take price impact.” — Marius Ciubotariu
3️⃣ Investor & Researcher Alpha
- The New Primitive: Fixed-rate borrowing is the essential catalyst for institutional "carry trades" on Solana. Watch for a surge in TVL (Total Value Locked) as these products move from roadmap to production in Q1.
- Liquidity Locality: While assets are cross-chain, liquidity remains local. Kamino is prioritizing bridging high-liquidity Ethereum assets (like PT-USDC) to Solana to bootstrap its own credit markets rather than waiting for native Solana versions to scale.
- Revenue Shift: Protocol revenue is shifting from retail "looping" fees to institutional "origination" and "backend" service fees. The "Build Kit" indicates a move toward a B2B2C model.
4️⃣ Strategic Conclusion
Kamino is transitioning from a lending protocol into a comprehensive credit layer for Solana. By solving for fixed rates and off-chain custody, they are removing the final barriers for institutional capital. The next step for the industry is the standardization of RWA liquidation via NAV-pegged AMMs.
