Jupiter Lend protocol is on the agenda again after community reactions. Chief operating officer (COO) of the exchange Kash Dhandaannounced that the social media posts shared regarding the protocol’s lending product, which claimed to have “zero risk of infection”, were “not one hundred percent true”. Posts containing controversial statements were silently deleted by the company.
Rehypothecation Debate Deepens
In the video statement he published at the weekend, Dhanda stated that the statement shared on social media that “there is no risk of contamination in isolated cases” was incorrect. The team acknowledged that they deleted the post in question but had to issue a fix at that moment. Discussions, co-founder of Fluid Samyak JainIt grew after ‘s confirmation that Jupiter Lend was implementing “rehypothecation”, that is, the reuse of collateral, for capital efficiency. Jain stated that the vaults are isolated, but each has its own configurations, collateral limits and liquidation rates, yet the collateral circulates in a common liquidity pool.
Kamino protocolMarius Ciubotariu, co-founder of Jupiter Lend, made harsh criticisms, arguing that its structure was misrepresented. “If the asset deposited in a vault is reused elsewhere, the risk of contamination is not eliminated,” Ciubotariu said. According to him rehypothecationThe existence of ‘insulation’ invalidates the claim of ‘isolation’ and this situation needs to be clearly announced.
Security and Transparency Concerns Increase
Dhanda argues that they use dynamic limits and customized liquidation engines to reduce risks, as claimed in the promotion of Jupiter Lend. He emphasized that the protocol survived the market crash in October without bad debt. But critics point out that the system is only a few months old and has not undergone adequate stress testing. An industry source stated that the structure involving rehypothecation was a “breach of trust”.
As Jupiter Lend’s total value locked (TVL) exceeds $1 billion, the platform is in the Solana ecosystem Kamino It competes directly with. The Jupiter team said it will release new documents and an explanatory video following the Solana Breakpoint conference in Abu Dhabi on December 11. But the community seems to agree that the concept of “isolation” needs to be redefined.
