Jupiter Lend vault faces accusations of "incomplete isolation," Fluid and Kamino co-founders issue joint statement.
TL;DR
Jupiter Lend's vaults face accusations of incomplete isolation, with co-founders admitting assets are not fully segregated and users bear risks from nested lending systems, leading to community scrutiny.
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On December 7th, the independence of Jupiter Lend's vaults was questioned by the Solana community. Fluid and Kamino, co-founders of the platform, jointly issued a statement claiming that the promise of "complete segregation" of the vaults was untrue. Samyak Jain, co-founder of Fluid, the Solana ecosystem lending protocol, admitted that Jupiter Lend's vaults used re-pledge for capital efficiency and that the assets in each vault were "not completely segregated." As a result, Jupiter Exchange is facing strong scrutiny from the Solana community.
Marius, co-founder of the Solana ecosystem liquidity protocol Kamino, stated that Kamino banned the Jup Lend migration tool this week because users were misled and unaware of the protocol's design and risks. Jupiter Lend's repeated claims that there are no cross-correlations between assets and that "users will not be affected if adverse events occur in assets across different vaults" are completely unfounded. In Jupiter Lend, if a user provides SOL and borrows USDC, the SOL will be lent to revolving lenders, including JupSOL, INF, etc., and the user will bear all the risks associated with these nested revolving systems or asset collapses.