Hi Everyone! Welcome to another BeInCrypto AMA Session!
Today we welcome Marius (@y2kappa) who is the co-founder of Hubble Protocol, which has just launched Kamino Finance: a brand new automated liquidity provider optimizer on Solana.
(This AMA has been edited for clarity)
COMMUNITY: Here is how things will work. I’ll have 10 questions for Marius. After that, our chat will be open for you to drop your questions so that he can pick up 3 out of all the questions you asked. Good luck to you all!
Let’s get started >>
BeInCrypto: I would like to ask you something general to kick things off, so please provide some personal background as well as some background on Hubble Protocol and its USDH stablecoin.
Marius: I started my crypto/DeFi journey at the Solana Seasons Hackathon back in June 2021. I just loved the Rust language, and was excited at the Solana infrastructure, and what it enabled for decentralized finance. The idea of Hubble and USDH was born there, and fast forward 7 months, Hubble launched in January 2022. So Hubble has been live for exactly 7 months.
BeInCrypto: I know that Kamino has been incubated by the Hubble Protocol ‘to transform liquidity on Solana’. Can you tell us what you guys looked at before creating Kamino?
Marius: As a stablecoin issuer we were constantly looking to improve liquidity for USDH and we realized in time that concentrated liquidity is better suited than a normal AMM, as it gives lower slippage and much higher volume for much less TVL. So that’s when we decided to build a tool for Hubble to improve its stablecoin liquidity. That’s how Kamino was born.
BeInCrypto: Great, thanks for this explanation. In fact, we all know there are some ‘competitor’ platforms out there. However, Kamino really looks different from all of them. What makes you stand out? In short, how do you maximize capital efficiency and optimize yields?
Marius: We actually hired a quantitative analyst to research how best to maximize capital efficiency. At the moment, users that want to provide liquidity in concentrated liquidity market makers have to deposit manually and have to balance yield-earning with safe ranges. This can be a difficult balance to strike, and what Kamino does, is choose these ranges for you. It also auto-adjusts the ranges according to what our quantitative modeling indicates as the optimal range. This keeps your deposit in the ideal range and accumulates yields within that range.
BeInCrypto: I see. The CLMM (concentrated liquidity market maker) design was first introduced by Uniswap v3 but has some issues. What are some of these issues and how does Kamino offer a solution?
Marius: If users want to deposit manually into CLMMs, which has been the case thus far, they need to have a good idea of what a safe range is, as well as an idea of how their range impacts their yield. This can be quite a challenge, especially for new users who don’t have solid DeFi knowledge.
In addition, users typically experience impermanent loss faster in a CLMM than in a classic automated market maker (AMM), and it can be quite scary to suddenly have all your funds in one token, and no funds in the other token that you originally deposited.
All of these result in a barrier to adoption that CLMMs currently face. Despite its massively increased capital efficiency, people don’t seem to be adopting them that fast.
Kamino aims to simplify this, automating every step of the process, allowing users to deposit their funds, and Kamino chooses the ideal range, as well as automatically adjusting deposits to stay in the optimal range. On top of this, Kamino also auto-compounds yields from fees and rewards, redepositing them into the position. This makes it much more user-friendly to use CLMMs, which is to the benefit of everyone; users and DEXes.
BeInCrypto: Amazing, thanks a lot for this explanation. I always ask for some media (images, videos, etc…) in order to better present the projects to our community. Would you mind sharing any visuals of Kamino?
BeInCrypto: Cool. We also note the USDH stablecoin has a relevant role within your ecosystem. Could you please tell us how it’s connected to the Kamino structure? What benefits users can expect by using it?
Marius: Kamino will have quite a few benefits to USDH! First of all, Kamino will have a variety of USDH Vaults from Orca, the first of which is already live (and has reached its cap twice!), with more coming very, very soon. Secondly, and this is a big one, Kamino will tokenize all its positions, and these will be accepted as collateral for Hubble.
What this means is that users can mint USDH with Kamino’s kTokens, and use that USDH to deposit back into Kamino. This has the potential to bring large amounts of liquidity to USDH, which has a variety of benefits like peg stability, and overall trustworthiness as a stablecoin.
BeInCrypto: Makes sense! I think not all the members here are used to dealing with platforms/apps like yours so let’s take an educational approach to this question. Is there any tutorial on how to start earning yield with Kamino?
Marius: We put a lot of effort into making the Kamino App (app.kamino.finance) as user-friendly and simple as possible, with explainers and walkthroughs along every step of your journey through the App.
If you have any questions beyond that, a good start would be to go straight to our Discord, where the Kamino core contributors have already been helping out users with any questions they have: Discord.
Our launch article also goes through the basics of Kamino, and its purpose, really well:
BeInCrypto: Well, it’s time to ask you something about risk and security. How does Kamino deal with and try to protect users from Impermanent Loss? How safe are all the funds? Any external links from audits or similar processes are welcome!
Marius: From launch, Kamino users will experience very little impermanent loss, as Kamino will only have stable vaults, and pegged vaults (like SOL-stSOL). Once Kamino has volatile pairs on the app, it will limit impermanent loss as far as possible by rebalancing positions based on quantitative models. And the best part is that this process is fully automated (of course).
And yes, we take security EXTREMELY seriously, and already have one full audit complete, with another two in the works. Here’s the audit link.
BeInCrypto: Fine! I suppose your roadmap is fully packed with activities. What can Hubble and Kamino enthusiasts/users expect when it comes to future plans? What do you have in mind for Kamino in the next few weeks or months?
Marius: We are going to be chasing two goals at once:
1. We want to optimize Kamino to make sure that the vaults perform as well as possible, and give users the best returns while maximizing capital efficiency.
2. We will be working aggressively to establish partnerships, get kToken integrations, and grow Kamino as much as possible.
We have a very strong group of technical contributors to do number 1 and a very strong group of growth contributors for number 2
BeInCrypto: Awesome, that’s it. I’m quite sure we’ve covered all the main topics today. Could you please share all the links to your Social Media channels so that our community can get to know Hubble Protocol and Kamino Finance a little better?
Marius: For sure!
Community: As a new small investor in the cryptocurrency market and projects I would like to know if your project is just for elite investors or is it for almost anyone to join in??
Marius: It’s for everyone, no barrier of entry, that’s the cool thing about defi, openfi, but of course, you need to do your own research.
Community: Could you please tell us a little about your upcoming roadmap and events? What are your priorities this year and where do you see your project next 5 years?
Marius: Improving the liquidity for different tokens is a huge endeavor and it will translate into multiple deliveries, watch our Twitter.
Community: How safe and secure is your platform and how do you maintain security? Do you have any audit plans?
Marius: One audit completed, two in progress
Community: What are your plans to increase and ensure global adoption of your project? How do you plan to attract institutional and individual investors-users?
Marius: By offering sustainable yield, and a product that serves their needs. A lot of people are looking for stable yield strategies.
Community: Have you created any Ambassador programs for people in different places in the world?
Marius: Please check our Discord. we’re welcoming people to apply for roles.
Other SM channels: