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The Jupiter Lend protocol has returned to the spotlight following community backlash regarding risk claims. Kash Dhanda, the Chief Operating Officer (COO) of the platform, recently admitted that social media posts suggesting the lending product comes with “zero contagion risk” were not “entirely accurate.” The company has since quietly removed the controversial posts from their platforms.
Lending Practices Under Fire
In a video statement released over the weekend, Dhanda acknowledged that the phrase “no contagion risk within isolated vaults” circulating on social media was incorrect. Despite deleting the post, the team recognized it was necessary at the time to issue a correction. The discussions were further fueled when Samyak Jain, co-founder of Fluid, confirmed that Jupiter Lend uses “rehypothecation”—the practice of reusing collateral for capital efficiency. Jain clarified that while the vaults are indeed isolated with their own configurations, limits, and liquidation rates, the collateral circulates within a common liquidity pool.
Marius Ciubotariu, co-founder of the Kamino protocol, issued strong criticism against the perceived misrepresentation of Jupiter Lend’s structure. He emphasized that if assets deposited in one vault are reused elsewhere, the claim of no contagion risk is invalid. Ciubotariu argued that the existence of rehypothecation negates the claim of isolation and stressed the need for transparent communication of such practices.
Growing Concerns on Security and Transparency
Dhanda, defending Jupiter Lend’s promotional claims, mentioned their use of dynamic limits and customized liquidation engines to mitigate risks. He highlighted that during the market crash in October, the protocol remained operational without incurring bad debt. However, critics caution that the system is only a few months old and has not undergone sufficient stress testing. An industry insider pointed out that the inclusion of rehypothecation could be perceived as a “breach of trust.”
Currently, Jupiter Lend boasts a total value locked (TVL) exceeding $1 billion and is in direct competition with Kamino within the Solana $132 ecosystem. The Jupiter team announced plans to release new documentation alongside an explanatory video following the Solana Breakpoint conference in Abu Dhabi on December 11. Despite these efforts, the community seems to agree on the need to redefine the concept of “isolation.”
