Jupiter Lend admits to inaccurate information about vault structure

Kash Dhanda, COO of Jupiter exchange, reassured the community on Saturday, admitting that some previous promotional posts about Jupiter Lend—which claimed the vaults were “risk-free from contagion”—were inaccurate and have been deleted.

Previously, Jupiter described Jupiter Lend’s vaults as having “isolated risk,” even claiming that the vaults “completely eliminate the risk of contagion between asset pairs.” The post containing this statement was removed by the team when controversy arose.

“We once said that isolated risk vaults guarantee ‘zero risk of contagion.’ That’s not entirely accurate,” Dhanda said in a video sent to the community. “We deleted it to avoid widespread misunderstanding. We should have clarified it at that time.”

Controversy Surrounding Collateral Rehypothecation

Samyak Jain, co-founder of Fluid—the infrastructure provider for Jupiter Lend—confirmed that the protocol uses rehypothecation, i.e., reusing collateral to optimize capital efficiency. This means assets deposited in one vault may not be completely separated from assets in another vault. However, Jain said each vault still has its own configuration, such as asset limits, liquidation thresholds, and liquidation penalties.

Marius Ciubotariu, co-founder of the Kamino lending protocol, criticized Jupiter Lend on X after Kamino blocked a competitor’s refinance tool. According to him, rehypothecation means the vaults cannot be considered “isolated.”

“If you deposit SOL and borrow USDC, your SOL could be lent out to loopers like JupSOL or INF… You bear all the risks from those loops,” he wrote. “This is not risk isolation as advertised.”

Dhanda rejected this definition, arguing that “isolation” in Jupiter Lend refers to each vault having its own risk parameters, and sharing the liquidity layer is part of the yield generation model.

An industry expert commented: “Advertising isolated vaults while rehypothecating assets is hard to accept. It severely undermines trust.”

Rapid Growth and Head-to-Head with Kamino on Solana

Launched in August, Jupiter Lend attracted attention with its “dynamic limits” to reduce risk and LTV ratios up to 90%—much higher than the typical 75% seen in DeFi markets.

Dhanda said the market crash event on October 11, when over $20 billion in leveraged positions were liquidated, demonstrated that Jupiter Lend’s model performed stably. The protocol reported no bad debt.

Currently, Jupiter Lend’s total value locked (TVL) has surpassed $1 billion according to DefiLlama, making the protocol a direct competitor to Kamino—which holds over 60% of the lending market share on Solana.

Jupiter said it will release additional technical documents and explanatory videos after the Solana Breakpoint conference taking place from December 11 in Abu Dhabi.

Vuong Tien