Kamino Finance offers solid strategies to earn yield in the Solana ecosystem, while Solana has established itself as a central chain this cycle and is the third biggest DeFi network by TVL. Notably, Kamino includes the Multiply feature, letting users build leveraged positions on the tokens they supply, in order to amplify returns, and the protocol recently announced that some maximum leverage levels have been increased, meaning it’s an optimal time to revisit the platform.
If you’re looking for some solid yields in the Solana ecosystem, then take a look at the latest developments over at Kamino Finance, which recently changed its parameters to offer some increased earning options.
This relates to Kamino’s Multiple function, which allows users to use a Looping process, which effectively means using leverage to amplify your returns, although it’s a passive earning method.
We covered looping on Kamino Finance here before, in October last year, so to catch up on where the protocol was back then, take a look at the earlier guide. Basically though, looping means you deposit a token, swap it for another, borrow against that to receive more of the original token, and then repeat that process–possibly multiple times–to build up a leveraged position, although with Kamino Multiply this is an automated process.
Before we carry on, please also remember that DeFi comes with risks, including smart contract vulnerabilities, frontend exploits, token de-pegs, borrowing rate changes, and systemic risks across DeFi and crypto.
Why Use Kamino Finance?
First of all, as mentioned, the looping process is fully automated on Kamino, saving you a lot of time. However, the other plus point of using Kamino is that you will be operating on Solana. This is important because when you’re holding tokens, you’re taking a bet on that particular ecosystem and its potential to maintain lasting value, and Solana is now in a more proven position than ever before.
Throughout this cycle’s memecoin mania, Solana was processing huge amounts of onchain activity and raising its profile at the same time, and it’s worth looking at it in comparison with Ethereum. We can see here that while Ethereum is still by far the number one DeFi chain, with 52.5% of TVL, Solana is positioned respectably in third place (after Bitcoin) with 7.05% of TVL.
But where things get really interesting is if we take a look at the SOL/ETH rate, which has been climbed steadily in a continued uptrend that goes all the way back to Q3 2023.
And there’s also recent news of spot SOL ETFs to launch this week in Canada, while several filings to launch similar products in the US are currently being processed at the newly crypto-friendly SEC.
Increased Leverage
Getting back to Kamino Finance in particular, a key reason to take another look right now is that it last week announced it was altering the parameters on the Multiply function. This is in order to provide increased maximum leverage limits on all supported LSTs, going from a 5x multiplier to a 7.5x multiplier, meaning that the APYs on those loops can now be taken higher than before.
That announcement also goes into detail about the liquidation risks involved. It’s advisable to read through the full explanation, but it demonstrates that such risk is present…
