Kamino, a lending protocol on Solana, has gone live with a market allowing Zcash holders to post ZEC as collateral and borrow USDC against their positions, according to a post on X.
The ZEC market operates as an isolated lending pool, meaning losses in the ZEC market cannot affect borrowers or lenders in other Kamino markets. Allez Labs curated the market parameters. Isolated markets are a standard risk management tool in decentralized lending; they have become common across protocols like Aave and Compound to limit contagion when a single collateral asset experiences stress.
Kamino is built on Solana and has grown into one of the network's larger lending venues. The protocol had accumulated $1.2 billion in total value locked as of early 2024, though live TVL figures at launch of the ZEC market were not disclosed.
Zecash is a layer-1 blockchain focused on privacy. The network has a market capitalization of roughly $2.5 billion and trades on major exchanges including Kraken and Coinbase. Users can now borrow against ZEC on Solana without leaving the ecosystem for a cross-chain bridge.
Lending protocols have been adding collateral options across multiple chains. Aave has integrated assets from multiple blockchains through its cross-chain governance, and Compound has added support for wrapped and synthetic versions of off-chain assets. Kamino's move keeps ZEC borrowing confined to Solana and relies on wrapped or bridged ZEC rather than native ZEC on the Zcash blockchain.
Allez Labs, a developer and market curator, designed the market's parameters, including borrowing caps, collateral ratios, and interest rate curves. Protocol governance or the founding team typically retains the ability to modify these parameters if market conditions shift. Kamino has operated without a separate governance token as of this writing, keeping control centralized with the protocol developers.
The isolated market structure means ZEC borrowers and lenders face only the credit risks of their own market, but no cross-protocol contagion if ZEC collateral falls sharply. If ZEC backing falls below the maintenance collateral ratio required by the market, borrowers will face liquidation, with collateral sold to lenders or liquidators at a discount. The specific liquidation discount and collateral ratios for this market were not announced at launch.
