Kamino LP Corner #7

BbyA...nMtW

14 Sept 2024

169

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?

Not great. The market has gone sideways and down mostly. The lack of trading fees has exposed us more to the price action.
That said, price action is heading in the right direction of late.

The candidates

Our thesis from last time was Solana breakpoint would raise all boats Solana defi.
And... that's still our thesis TBH. It's just taken longer than we expected to see the news from that impact the market. Given Breakpoint is a still a week away, we're going to stick with Solana defi.

Both Zeta and Drift given both have teased significant announcements at Breakpoint.

Read more on X

And Jito's restaking products continue to build momentum.

Read more on X

Token prices

As we run into Breakpoint we can see all the defi protocols are starting to pick up.
ZEX and DRIFT particularly given the expected announcements from both teams and their current roadmaps.
KMNO has seen strong growth of late as well.
Of the large defi players JTO, MNDE and RAY haven't seen as much of a reaction but given their product offerings are more mature compared to the others that is maybe to be expected going into a conference.
Though they all could still surprise us. Especially JTO given their recent foray into the restaking world.

To LP or not to LP

Here's the positions we went with.

KMNO has been on a tear of late due to their partnership with PayPal. There's a decent chance they announce something as big at Breakpoint

DRIFT and ZEX both are expected to announce new projects. In the case ZEX they've already revealed in the most recent community call they'll be demoing their L2 at Breakpoint during their presentation.

JTO already launched restaking a while ago but for a product like this it's all about who then builds with it and what they build. Given the Jito teams' track record you wouldn't bet against them announcing something big at Breakpoint. Maybe even in conjunction with one or more of the above protocols.