How Kamino Turned xStocks Into a Lending Market

Most DeFi lending markets spend months trying to hit 50% utilization. Kamino launched a market around xStocks as collateral and quickly hit 92%.

That's not an accident.

It's the result of a product structure that connects real yield to real demand, reinforced by the right incentives at the right time. Kamino had already built one of Solana's largest lending protocols before xStocks arrived. When tokenized equities went live onchain, the demand for lending and borrowing followed almost immediately.

The xStocks market on Kamino

Kamino started as a single, monolithic lending market on Solana and has since expanded into modular, asset-specific markets. The xStocks market is one of those: built specifically around xStocks as collateral.

The mechanics are straightforward:

1. Deposit xStocks assets like $SPYx or $QQQx
2. Borrow USDC or other stablecoins against them
3. Deploy that capital however you want

For traders who want leveraged long exposure to tokenized equities, it's a cheaper alternative to perpetual futures. Vik, core contributor at Kamino, joined Tokenized Talks to walk through the mechanics.

On a PerpDEX, funding rates get expensive over time. A position you plan to hold for weeks gets eaten by those rates. On Kamino, the borrow APY is more predictable and generally much lower.

"You would prefer to go long or short with lower leverage on Kamino if you're looking to hold a position for a long time," Vik said.

As of April 2026, $6.3M USDC was supplied, and $5.75M was borrowed, resulting in a 92% utilization rate. At that level, lenders are generating meaningful yield just by depositing USDC into the market.

How users are borrowing against tokenized stocks

Most users are running straightforward leveraged longs. They deposit $SPYx or $QQQx, borrow USDC, and redeploy. Some use the structure for pair strategies, going long one tokenized asset while managing short exposure elsewhere.

That activity picked up significantly after xPoints launched. Before the program, the market was live but not particularly deep. After, it doubled in size. Kamino's xStocks volume now exceeds what some centralized exchanges are doing with the same assets during an ongoing incentives campaign.

The program changed behavior by giving users a reason to put xStocks to work rather than just holding them. Depositing as collateral, borrowing against it, maintaining utilization: all of that became rewarded activity.

What this means for tokenized equities in DeFi

The Kamino case shows a pattern worth paying attention to. xStocks usage grows when protocols build real products on top of the underlying access. That, paired with a $40,000 in onchain incentives, doubled a lending market that now outperforms two major CEXs on the same assets.

At 92% utilization with $6.3M supplied, the market is already constrained. More suppliers means more borrowing capacity, which means more strategies available to traders.

That's the next chapter: the same assets, more depth, more use cases built on top.

FAQ

What xStocks assets can I use as collateral on Kamino?
The Kamino xStocks market currently supports assets including $SPYx and $QQQx as collateral to borrow USDC. Kamino plans to expand to additional liquid xStocks assets over time.

How does borrowing against tokenized stocks work on Kamino?
Users deposit xStocks tokens into the Kamino lending market, which generates a borrowing limit in USDC. They can then borrow stablecoins up to that limit and deploy it onchain to generate yield with the stablecoins or lever up via Multiply for additional exposure. The borrow APY is determined by the market's interest rate curve and rises with utilization.

Why use Kamino instead of a Perp DEX for leveraged exposure?
For long-term positions, Kamino's borrow APY is typically more stable and lower than perpetual futures funding rates, which can compound significantly over weeks or months.

What is xPoints and how does it relate to Kamino?
xPoints is an incentive program from xStocks that rewards onchain activity including depositing xStocks as collateral and maintaining utilization in lending markets like Kamino.

Is xStocks available in my country?
xStocks is available in 110+ countries. It is not available to persons in the U.S., UK, Canada, Australia or sanctioned jurisdictions.

xStocks are issued by Backed Assets (JE) Limited (a Jersey private limited company) and offered to eligible Kraken customers via Payward Digital Solutions Ltd. ("PDSL"), a company licensed to conduct digital asset business by the Bermuda Monetary Authority. xStocks are not nor will be registered with any local securities regulators. PDSL (Kraken) does not provide investment advice. Individual investors should seek professional independent advice as to the suitability of any investment, including potential tax treatment. Investing in xStocks involves an element of risk. Past performance does not indicate future results. Not available in the U.S., UK, Canada, Australia or to persons in sanctioned jurisdictions. Geo restrictions apply. Read Kraken's xStocks Risk Disclosure at kraken.com/legal/xstocks as well as the Base Prospectus and related Final Terms for xStocks at assets.backed.fi/legal-documentation to learn more.