Borrow on Solend with Kamino kTokens as Collateral
Note: This article is not financial advice. Kamino Finance does not endorse any tokens or platforms mentioned in this article.
Overview:
- Kamino and Solend are creating new borrowing opportunities.
- Solend accepts Kamino kTokens as collateral.
- Users can leverage Kamino positions by borrowing on Solend.
Kamino Finance is proud to announce it has partnered with Solana's biggest lending protocol, Solend, to bring users extra utility for providing liquidity on Kamino. For the first initiative of this partnership, Solend will begin accepting Kamino's kTokens as collateral for borrowing multiple crypto assets in the USDH Pool.
Kamino strives to become the ultimate liquidity destination on Solana, and Solend can help play an instrumental role. By borrowing stablecoins against kTokens on Solend, users can participate in one of the most exciting use cases created by this partnership: leveraging liquidity positions on Kamino.
New Assets Added to Solend's USDH Pool
The USDH Pool has offered extremely favorable rates for borrowers and lenders, and it has become one of the top isolated pools in terms of total supply. Until now, the USDH Pool on Solend held five major crypto assets for borrowing and lending, and now it will add kTokens for even greater borrowing flexibility.
Along with two initial kTokens, USDC will also be added to the pool. This will increase users' borrowing flexibility and ability to leverage stablecoin vaults on Kamino that are not managing USDH pairs.
The first kTokens added to the USDH Pool include:
Users can borrow up to 75% loan-to-value (LTV) against the value of their kToken deposits, and the liquidation threshold will be set at 85%. There is also a 0.1% fee for borrowing assets when using kTokens as collateral.
How to Leverage Kamino Positions with kTokens on Solend
With such a high LTV ratio, favorable rates, and kTokens that represent underlying positions in stablecoin liquidity, users may find it incredibly easy to participate in DeFi composability. Additionally, kTokens used as collateral accumulate fees from trades while liquidity is provided on Kamino.
With the addition of kTokens on Solend, users are capable of looping their borrowed USDC back into Kamino and leveraging their position. This can be done multiple times to increase exposure to earning fees and rewards from providing stablecoin liquidity.
Here's an example of how users can use kTokens and Solend to leverage a USDH-USDC position on Kamino:
- Deposit liquidity into the USDH-USDC vault on Kamino.
- Deposit kUSDH-USDCo on Solend.
- Borrow USDC or USDH.
- Repeat Steps 1-3 to increase leverage
Thanks to Kamino's automated services, users don't even have to split their borrowed USDC into USDH or vice versa, as single asset deposits are accepted. The same process can be executed with each stablecoin vault represented by kToken collateral until the maximum caps are reached on Kamino and Solend.
Kamino and Solend Work Wonders for Liquidity on Solana
Borrowing from Solend using kTokens as collateral is a monumental step forward for the composability of decentralized finance (DeFi) on Solana. Consequently, the protocol is excited to work with Solend to provide users with ample opportunities to enhance their liquidity on Solana.
When kTokens were added as collateral to borrow USDH on Hubble Protocol, the maximum cap limits were reached within a day. It will be interesting to see how much interest the community takes in borrowing against kTokens on Solend.
