I guess better late than never.
Some people told me I should improve the comms and that I should have explained our decision better.
It’s very simple - this week blocked the Jup Lend migration tool because our users have been misled about the protocol design and the risks they are taking.
Jupiter Lend claimed repeatedly that there is no cross contamination between assets - that if something bad happens to an asset in a different vault, you have no exposure to those other assets (see video below).
That couldn’t be further from the truth.
In reality, in Jupiter Lend, if you supply SOL and borrow USDC, your SOL gets lent out to loopers, including JupSOL, INF, etc. You take all the risk of those loops or assets blowing up.
There is no isolation here and full cross contamination, contrary to what is advertised and what people are being told.
In TradFi but also in DeFi, the fact that your collateral is rehypothecated or not, has contagion risks or not, is material information and should be very clearly disclosed. Not only that, but it should definitely not be claimed otherwise.
I come to this app every day to talk about risks, security, smart contracts. I have tried to cultivate a culture of risk awareness and financial literacy in Solana DeFi.
Our users’s security is and has always been our no. 1 goal.
I cannot, in good conscience, make this migration easy when our users (those with a Kamino position) have been misled into refinancing and about what happens to their funds when they migrate.
Users are always free to withdraw from Kamino, that never changed.
Equally, migration tools should be two way and be clear about the risks as well as the yields. I am all for open finance, and if that happens we will remove the block in a heartbeat.
(today the videos and tweets have been deleted, but I can attach them below)
can we just acknowledge that
@jup_lend @kashdhanda has been blatantly LYING this entire time about having isolated vaults??
this is absolutely ridiculous and misleading.
"isolated vaults" should mean that if i deposit my asset nobody is going to touch it.
if it gets rehypothecated that is the DEFINITION of not being isolated and it increases risk by many fold!!! and it would be okay, but if users don't know this (because you are LYING) then they don't know the risk they're taking, which is NOT okay.
not being isolated means that if something happens to jupSOL or INF, it's going to be a complete disaster to EVERYONE without them even knowing! and this can get especially bad when you introduce leverage...