Kamino LP Corner #2

BbyA...nMtW
28 May 2024
256

If you're unfamiliar with Kamino Finance see my explainer post here https://www.bulbapp.io/p/34c42de2-547e-47a8-b72d-9b8b61c6fde2/use-cases-for-kamino-finance?s_id=2936eabf-734f-4bf5-9069-4a3ef2173b8c


My process is pretty simple:

  • Look the analytics on Kamino for each LP
  • Look at the token prices on CoinGecko/CMC


Remember always: An LP IS a trade. It's a different type of trade as you're buying position on yield curve and you're collecting transaction fees, but it's still a trade so the normal assessments as goes price applies.

Generally we're looking over a 3 week time period in the LP. Each period we'll close out our positions entirely and start afresh with new ones. Obviously if you're doing this yourself you'd want to keep some positions much longer than that but we're looking to make this educational and as accessible as possible so we're coming from a start fresh approach each time.


Let's dive into the analysis!





How did we do from last time?

[NOTE #1 was over 2 weeks, all following posts will be over 3 weeks]



We've had some interesting results!

  • POPCAT-SOL earned us the most fees but we've lost money overall due to price movements. Obviously we're only looking at 2 weeks at a time, but with that kind of fee return that makes this LP a pretty longer term candidate given prices go down and up.
  • ZEUS-SOL and KMNO-SOL had modest returns on fees made a bit better via the LP incentives, but ZEUS-SOL was our best return because the price movements.





The candidates

This time we're going to look at highest volume and then look for a some good TVL + APY candidates.





Kamino Vaults


https://app.kamino.finance/liquidity/HWg7yB3C1BnmTKFMU3KGD7E96xx2rUhv4gxrwbZLXHBt


https://app.kamino.finance/liquidity/HS4VSMsJDuJTmKfZkXsM9JNwp4pK1LVTc7GLmiu5jNBT



https://app.kamino.finance/liquidity/4a8SwegmCMK6NytetcDUs1jHqQLaVQ6agm9Tbqde9arG


https://app.kamino.finance/liquidity/HFjCeWXB1hTqJXRKfaNfLWXMTiKD1LdSYw8THiSsLgs7



https://app.kamino.finance/liquidity/AswrnRqNR4UXU93Bfgmjr313zf5snCNQwpSVT36HBJM6



Token prices

A large part of your PnL will be movement in token prices. That becomes less and less over time as compounded fees add up but in the short to medium term price will significantly affect your position.





To LP or not to LP

We're going to go with the following LPs

JUP-BONK

It was a toss up between this and BONK-SOL but the deciding factor was that JUP has underperformed so far compared to SOL so there is possibly more room for price growth in JUP.
BONK has likely outperformed so we should expect to see that possibly negatively impact our PnL.
There's also staking rewards on the LP, it's just they aren't live at the moment. If those are refilled at all then we'll also get them.


MYRO-SOL

This is a fairly easy one to be honest. SOL has underperformed a bit of late so hopefully should see positive price action. MYRO is up in the shorter term but over the longer term it still has some room to grow possibly.
The yields are good too on the Kamino strategy.


TNSR-JitoSOL

This is our safety in a way. Both jitoSOL and TNSR have underperformed over the longer term still but are showing good signs of better price action.
The Kamino strategy isn't as good as our other picks BUT there is a large token incentive still running on the LP which gives us a more reliable "fall-back yield".







Over to you!

Where are you LP-ing at present? Kamino?
Got some insights to share? Let me know in the comments.

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