Solana’s lending ecosystem is facing one of its most serious transparency disputes yet after Jupiter admitted that its promotional claims of “zero contagion risk” were incorrect, a concern that led Kamino Finance to block user migrations over undisclosed rehypothecation exposure.
The clash has triggered a broader reckoning across Solana DeFi over whether major protocols are accurately disclosing systemic risks to users.
What Happened
Kamino co-founder Marius Ciubotariu on Saturday triggered the controversy when he announced that Kamino had blocked Jupiter’s migration tool, arguing that users were being led into refinancing positions under false expectations of vault safety.
Ciubotariu said Jupiter repeatedly told users that vaults were isolated and protected from shocks in other asset pools.
“That couldn’t be further from the truth,” he wrote, stating that in Jupiter Lend, a user supplying SOL and borrowing USDC “takes all the risk” of assets like JupSOL or INF blowing up because their collateral is lent to loopers.
He framed the issue as a basic matter of disclosure, whether a protocol tells users that their collateral is being rehypothecated and whether contagion is possible as a result.
“This is material information and should be very clearly disclosed,” he said, adding that Kamino could not, “in good conscience,” assist migrations when users had “been misled about the protocol design and the risks they are taking.”
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Jupiter Acknowledges Its Post Was 'Not 100% Correct'
Hours later, Jupiter co-founder Kash Dhanda released a video responding to the criticism and addressing Jupiter’s deleted posts.
He said that the now-removed message stating there was “zero risk of contagion” was incorrect.
“That post overall was not 100% correct… we deleted it to avoid it kind of going any further,” Dhanda said.
He called the error “regrettable,” adding that Jupiter would implement stricter review policies to ensure “every last word is precise going forward.”
However, Dhanda defended the protocol’s architecture, insisting that Jupiter’s isolated vaults are isolated at the parameter level, with independent LTVs, liquidation rules and asset limits, even though rehypothecation exists.
He argued that Jupiter’s structure, combined with conservative listings and risk controls, minimizes contagion.
He pointed to Jupiter’s performance during Solana’s 10-10 volatility event and to Fluid’s multi-year record without bad debt as evidence that the model can work.
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