Jupiter Lend Faces Scrutiny Over Vault Safety

Jupiter, the majority shareholder of Moonshot, is now in the spotlight after users raised concerns about how its lending product, Jupiter Lend, actually works.

A deleted social media post and rising criticism from industry rivals have triggered a wider debate about how isolated the platform’s lending vaults really are. Over the weekend, Chief Operating Officer Kash Dhanda addressed these concerns and clarified earlier communication from the company.

Jupiter Lend Clears Up Vault Risk Confusion

Earlier promotions had described Jupiter Lend’s vaults as carrying isolated risk, implying that assets in one vault could not create problems for another. This message became a point of controversy once users began questioning how the system actually works.

Dhanda acknowledged this past social media post was not completely accurate. He said the team removed the post to stop misleading information from spreading. 

Fluid co-founder Samyak Jain confirmed that Jupiter Lend uses rehypothecation. This means collateral deposited in one vault can be reused elsewhere in the protocol to improve efficiency. As a result, vaults are not fully independent from one another.

Jain explained that each vault does have its own configuration, including specific limits and liquidation settings. However, the shared liquidity layer still links the system together.

However, this explanation did little to calm critics. Marius Ciubotariu from Kamino said that if rehypothecation is involved, the vaults are not truly isolated and unsafe for users. 

Debate Grows Over What Makes Jupiter Lend Isolated

The main disagreement centers on how “isolation” should be defined. Dhanda and Fluid co-founder Samyak Jain believe that having separate vault configurations qualifies the system as isolated. Ciubotariu, on the other hand, rejected this view. 

He said that many decentralized finance (DeFi) platforms offer similar configuration flexibility. Ciubotariu added that this does not justify describing a system as isolated in terms of risk. Some industry observers share this concern. 

An insider said marketing isolated vaults while using rehypothecation confuses users and hurts trust. Dhanda responded that rehypothecation is part of the system’s design and how yield is generated.

Jupiter Lend’s Rapid Growth Sparks Fresh Tensions with Kamino

Jupiter and Kamino had ongoing issues . Days before the public criticism, Kamino blocked Jupiter Lend’s refinance tool from accessing Kamino positions. Ciubotariu said he might remove the block if Jupiter stopped describing its vaults in a misleading way. He also said the refinance tool must work in both directions.

Dhanda has said that Jupiter plans to release more documentation and an in-depth video explaining its system. However, the company has not yet issued additional public comments.

Since launching in August, Jupiter Lend has expanded quickly, crossing $1 billion in total value locked according to DefiLlama. This growth places it in direct competition with Kamino, which currently holds more than 60% of Solana’s lending market.

Dhanda highlighted Jupiter Lend’s stability during the large market crash on October 10, when leveraged positions across crypto saw massive liquidations.