The Solana DeFi protocol will give extra KMNO to its "longest" users
The new rules will give additional – albeit unspecified – rewards to "OG" users of Kamino, which hosts various decentralized finance (DeFi) products for borrowing, lending, staking and earning interest on Solana tokens. Points-earning strategies will also be lessened, Kamino said in a post on X, formerly Twitter.
"We hear you," Kamino's account posted mid-Monday, trying to quell four days of blowback it has faced from users since announcing the details of its airdrop, scheduled for April.
The turnabout underscores the profits and perils of using points to divvy up tokens on Solana – These mechanisms give protocols a way to quantify their users' contributions and a means for those users to measure their rank against everyone else. But it also opens the door to gaming the system, especially when the people in charge are overly transparent. That's exactly what came for Kamino.
Protocols don't usually tell users the full rules of the points system before everyone's finished playing it. This ambiguity may be frustrating but it limits opportunities to game the system. Kamino, which announced its points program immediately after the Jito airdrop, eschewed this mantra; it played instead with an open hand.
Kamino's April Airdrop
Earlier this month Kamino confirmed it was on the verge of rewarding its users with an airdropped token and slated the distribution for April. As expected, Kamino said it would tie users' allocations to the number of points they accrued by borrowing, lending and participating in its various DeFi products.
Many people had long awaited this news and had tied up thousands of dollars-worth of crypto on Kamino in order to earn its points and get more of the KMNO token. But the airdrop announcement rocked their calculations by tethering their future allocations purely to the total number of tokens they could accumulate by the end of the month when Kamino would take the all-important snapshot.
Kamino's total-value-locked jumped 69% in the past five days to nearly $900 million, according to DeFiLlama. That jump can be attributed to surging deposits from traders taking advantage of the weeks remaining before Kamino said it would take the snapshot.
Even if late to the party, these newcomer depositors were likely angling to get a good position in the April airdrop by piling massive sums into the many token products that Kamino incentivizes with extra points. They could do this with more certainty than is usually found in the murky world of points-for-airdrops: last week Kamino said it would doll out tokens in a "linear" fashion, meaning based purely on how many points one holds.
On the one hand, it makes sense for a protocol such as Kamino to use linear models for its airdrop. When Jito did its widely successful JTO airdrop in December, it used a tiered model that gave big rewards to users with many accounts. Linear models do away with this kind of gaming. But confirming the model publicly, and giving everyone extra weeks to play it, left Kamino vulnerable.