DeFi on Solana is growing, and both Jupiter and Kamino Finance are key platforms. Kamino offers a product called Multiply, which executes automated looping strategies to leverage asset exposure, and this can be used with a range of tokens, including the JupSOL and JLP tokens from Jupiter. These tokens can each be swapped for through the Jupiter DEX aggregator, and then deposited into Kamino Multiply to execute a looping strategy.
If you’re looking to increase your DeFi gains on Solana, then it’s worth looking at how to execute a looping strategy, which sounds complicated but can be done with just a few clicks across a couple of big Solana platforms: Jupiter and Kamino Finance.
So, let’s take a look at what exactly looping means, why to use Jupiter and Kamino, and then walk through how to put this plan into action.
What Is Looping?
In DeFi, looping is a recursive strategy whereby you deposit an asset, borrowing another asset against it, trade that for more of the original asset, which is then also deposited and borrowed against, and the process can be repeated multiple times.
The upshot is that you leverage your exposure to the target asset, and ramp up yield and rewards. However, as DeFi requires loans to be over-collateralized, each loop is diminished, and there is a limit to how many rounds you can execute.
Why Use Jupiter and Kamino?
Solana has been one of the central chains of this crypto cycle so far: from bear market lows around $10 at the end of 2022, SOL is now trading at approaching $170, mindshare has been captured through the network’s emergence as a meme coin playground, and Solana’s DeFi presence is expanding this year, with TVL on Solana now standing at $6.4 billion.
And on Solana, Jupiter offers various services, revolving mainly around a DEX aggregator for swaps, and a perps trading exchange–but also taking in other products including the LFG Launchpad and the Ape Pro meme coin terminal. JUP is the governance token of the platform, but for looping purposes, we’ll focus on two other tokens: JupSOL and JLP.
JupSOL is a Liquid Staking Token that represents SOL that has been staked with Jupiter’s validator, while JLP is the liquidity token of the Jupiter Liquidity Provider pools, which enable perps trading on Jupiter.
JupSOL earns staking rewards, while JLP gains yield from perps trading fees, in both cases these rewards accrue to the tokens themselves, and Jupiter is currently the top decentralized perps exchange by TVL.
Meanwhile, Solana-based DeFi protocol Kamino Finance offers lending, borrowing, and other services aimed at enhancing capital efficiency. Kamino is growing steadily, and its TVL recently hit a new ATH of $1.7 billion.
Additionally, Kamino has a function called Multiply that automatically executes looping strategies, and this can be used with JupSOL and JLP, among other tokens.
How to Loop With Jupiter and Kamino
Before we begin, please note that this is not an endorsement of either Jupiter or Kamino Finance. You should not interact with any DeFi protocol if you do not want to place your funds in some degree of risk. Potential risks include smart contract exploits, frontend attacks, systemic risks across DeFi and crypto, market volatility, borrowing rate changes, and depegs. Please check Kamino’s Asset Risk Framework, along with…
