Kamino Supports Solana-native Stablecoins with New UXD Vault
Note: This article is not financial advice. Kamino Finance does not endorse any tokens or platforms mentioned in this article.
Overview:
- Kamino has added a vault that manages UXD liquidity.
- Supporting Solana-native stablecoins is a community priority.
Kamino Finance is pleased to announce the launch of the UXD stablecoin strategy vault. The addition of the UXD vault has made Kamino an automated concentrated liquidity solution supporting every major Solana-native decentralized finance (DeFi) stablecoin, including USDH, USDr, and USH.
Kamino plans on providing automated concentrated liquidity management for all tokens available on Solana. This utility will become especially important for the ecosystem’s stablecoins, as achieving deep liquidity is one of the most important elements of maintaining the health of a dollar-pegged stable asset on decentralized exchanges (DEXs).
The UXD vault will pair the token with USDC, the fiat-backed stablecoin most commonly paired with other stablecoins in DeFi for its stability and liquidity. Users who deposit either UXD or USDC into the UXD vault can earn optimized real yield from trading fees as Kamino automatically rebalances and auto-compounds their positions.
About UXD and Recent Protocol Innovations
UXD is one of the most liquid Solana-native stablecoins on the network, with around $15 million in circulation. The project has put a premium on innovating stablecoin designs to maximize capital efficiency, and UXD launched the first stablecoin on the market backed by delta-neutral positions on Mango Markets.
The project has pivoted towards a new design known as the Asset Liability Management Module. This new design incorporates lending, overcollateralized loans, real-world assets (RWAs), and other strategies on top of delta-neutral positions for maintaining UXD’s backing and ability to scale.
UXD also has plans to convert its governance token, UXP, into a cash-flow token that earns revenues from these various additional models. Along with these innovations, UXD will launch on Optimism, the Ethereum Layer 2 solution, making the platform a cross-chain stablecoin provider.
Since the market has slowed down and open interest has declined on Mango, UXD has lowered its maximum issuance cap from an all-time high (ATH) of $40 million to its current $15 million. Kamino hopes to help UXD build stable and deep liquidity as it strives to regain its previous ATH and beyond through multiple strategies on multiple networks
Kamino is Spearheading Stablecoin Growth on Solana
Kamino is a powerful tool for creating deep liquidity for tokens on Solana’s concentrated liquidity DEXs. By leveraging the power of Kamino, stablecoins can further stabilize their pegs with deep liquidity and reduce any price impact on their tokens during trading, especially during periods of volatility.
By adding another Solana stablecoin to Kamino’s automated vault offerings, Kamino has helped strengthen the stablecoin landscape on Solana. In addition, the launch of the UXD vault means that Kamino provides support for two Solana stablecoin projects, UXD and Hubble Protocol, working with Multicoin Capital to help build a more robust DeFi ecosystem on the network.
Since Kamino Finance launched, nine automated vaults have gone live with over $5 million in total value locked (TVL) deposited by Solana’s DeFi users.
