Kamino Finance Partners with Raydium to Optimize Solana DEX Trading

This article is not financial advice. Kamino Finance does not endorse any tokens or platforms mentioned in this article.

Overview

• Kamino and Raydium have formed a partnership on Solana.
• New Kamino vaults have been built on Raydium's CLMM DEX.
• Users can earn dual RAY rewards on Raydium and Kamino.

Kamino Finance has partnered with Raydium, one of the biggest decentralized exchanges (DEXs) on Solana. Kamino is excited to work with the Raydium DEX to ensure Solana’s decentralized finance (DeFi) community can access the deepest and most capital-efficient trading environment available on the network.

Kamino has been successfully optimizing various concentrated liquidity positions on Solana for stable, pegged, and volatile token pairs for months. Now, Kamino is proud to harness its experience and expertise to build automated vaults on Raydium’s concentrated liquidity pools.

Raydium Begins Offering Optimized Concentrated Liquidity with Kamino Vaults

Concentrated liquidity has proven to be the most capital-efficient model for supplying liquidity on a DEX, and Raydium has embraced this technology with its latest offering, a concentrated liquidity market maker (CLMM). Kamino is proud to support the CLMM space on Solana by building new vaults on Raydium.

The first Kamino vaults built on Raydium include some of Solana's biggest liquid staking derivative (LSD) tokens, Marinade's mSOL, and Lido Finance's stSOL. The first vault pairs include:

• mSOL - SOL
• mSOL - USDC
• stSOL - ETH
• RAY - SOL

To celebrate the launch of these vaults, Raydium has supplied additional RAY token rewards for each pair. The rewards will be available for four weeks and will be distributed on both Raydium and Kamino. This means that providing liquidity through Kamino will double users' exposure to RAY rewards as follows:

• mSOL-SOL: 1k RAY per week, per protocol
• mSOL-USDC:  3k RAY per week, per protocol
• stSOL-ETH:  2k RAY per week, per protocol
• RAY-SOL: 2k RAY per week, per protocol

How Kamino Optimizes Market Making for Raydium’s Concentrated Liquidity Providers

Providing concentrated liquidity can be a challenging task that requires constant attention and market-making skills. Liquidity providers (LPs) must set their own ranges for liquidity positions, and these positions must be rebalanced when necessary to avoid falling out of range, no longer earning fees from trading.

For example, when a position falls out of range, it can become 100% of the two assets paired. As shown in the screenshot above, when SOL’s price rises above a set range, then the position becomes 100% USDC, and if the price falls below the range, then the position becomes 100% SOL.

When this happens, users cannot earn fees from their deposit, since they are no longer actively providing liquidity for two tokens. Additionally, traders cannot access this liquidity while it sits dormant. Kamino automates rebalancing so that users don’t have to worry about rebalancing on their own, and liquidity remains concentrated around the current quoted price of an asset.

Users can even deposit a single asset and the protocol will split the liquidity into the precise ratio necessary. The only thing that users must do when providing Raydium concentrated liquidity through Kamino is:

• Choose a concentrated liquidity pool.
• Decide when to participate in market making.
• Deposit tokens in a Kamino vault.

Then, Kamino automatically sets and adjusts positions according to advanced quantitative modeling. In addition, Kamino continues auto-compounding fees and rewards on users’ behalf while they provide liquidity through Raydium's DEX.

Kamino and Raydium Build Next-Generation Liquidity Solutions on Solana

Decentralized trading thrives on liquidity provided by DeFI users, but users can find it incredibly difficult to interact with CLMMs as an LP. So, Kamino and Raydium are working together to ensure users have one of the smoothest experiences possible when providing concentrated liquidity on Raydium’s concentrated pools.

Building Kamino’s automated liquidity management solutions on top of Raydium’s concentrated liquidity pools will help reduce the barrier to entry for all users. Now, anyone who wants to provide capital-efficient liquidity on Raydium in exchange for earning fees from trading can do so with a few clicks of a button.

The easier it becomes for users to provide liquidity and earn, the deeper liquidity on Raydium can become, and then the easier it is to trade through Raydium with maximum capital efficiency. Together, Kamino and Raydium are working towards making decentralized trading on Solana the future of crypto trading.