Introduction
Kamino has established itself as one of the most innovative platforms in the DeFi space, offering flexible solutions and advanced tools for those looking to make the most of their digital assets. Among the many features available, the Lending and Borrowing system stands out as my favorite due to its efficiency and unique characteristics.
Introduction
In this article, I’ll share how I use Lending and Borrowing on Kamino, highlighting the unique repayment option using collateral, which simplifies management and reduces liquidation risks.
What is Lending and Borrowing on Kamino?
Lending and Borrowing are two foundational pillars of decentralized finance (DeFi). On Kamino, this functionality allows users to provide assets as collateral to earn interest (lending) or use these assets as collateral to secure loans (borrowing). This approach offers significant financial flexibility, enabling you to maximize the potential of your assets, whether by diversifying investments or seizing market opportunities.
Unique Features of Lending and Borrowing on Kamino
Kamino's standout feature is the ability to manually repay debt using your collateral balance. Unlike other platforms, this allows you to reduce liquidation risks without adding new funds, offering greater flexibility and control, especially during market volatility.
How I Use Lending and Borrowing on Kamino
Here’s a practical example of how I’ve used this feature to optimize my investments in a liquidity pool:
- I supplied an asset like SOL as collateral in the main market. This allowed me to access a loan in any other asset (except SOL).
2.When borrowing assets for my leverage strategy, I prefer to choose a stablecoin with a low borrow APY. This time, the selected asset is USDS.
3. Afterward, I trade my USDS for SOL and supply the SOL back as collateral. You can do this until you reach an LTV percentage that feels comfortable for you.
I kept an eye on the liquidation risk: During times of high volatility, when the collateral value decreased, there were moments when I had to use the repayment feature to reduce part of the debt with my collateral balance. This provided me with peace of mind and allowed me to remain focused on my strategy without the pressure of transferring additional funds.
The ability to adjust my position this way was essential to keeping my strategy active and avoiding unexpected losses..
Conclusion
Kamino’s Lending and Borrowing system not only simplifies asset management but also offers tools that truly make a difference, such as the manual debt repayment feature using collateral. This functionality, combined with the platform’s efficiency and transparency, transforms the experience for anyone looking to grow in the DeFi market.
If you haven’t explored Kamino yet, I highly recommend giving it a try and discovering the possibilities. Like me, I’m confident you’ll find it an indispensable tool for your financial strategies in Solana's chain.
