Jupiter exec acknowledges ‘zero contagion’ claim was ‘not 100% correct’ after backlash over vault design
A Jupiter Exchange executive admitted a claim of “zero contagion” risk in their lending vaults was inaccurate following criticism regarding their design and rehypothecation practices.Summary
Jupiter Exchange's COO, Kash Dhanda, acknowledged that previous social media posts stating Jupiter Lend vaults had “zero risk of contagion” were “not 100% correct” after community backlash. The controversy stemmed from the discovery that Jupiter Lend utilizes rehypothecation, meaning deposited collateral isn't fully isolated. While Jupiter maintains vaults are isolated in terms of individual configurations, critics like Kamino’s co-founder argue that any rehypothecation introduces contagion risk and should be clearly disclosed. Dhanda defended the protocol, stating rehypothecation is essential for yield generation, and highlighted Jupiter Lend’s performance during the October market crash as evidence of its resilience. The protocol has rapidly grown to over $1 billion in total value locked, becoming a competitor to Kamino in the Solana lending market, and plans to release further documentation to clarify its design.
(Source：The Block)