$KMNO Holders Question Token Utility as Kamino Launches Season 4 Rewards

Kamino Finance, Solana’s largest liquidity hub, has announced its Season 4 incentives campaign, introducing some critical changes to how users earn rewards.

Incentives are heavily geared towards Kamino’s Earn product, with $KMNO emissions bulking up APYs to attract capital inflows.

While Kamino celebrates becoming the biggest source of TVL on Solana, $KMNO holders have raised questions about the token’s lack of utility.

Kamino Season 4 to Distribution $5.1M in $KMNO

In all previous iterations of Kamino’s reward seasons, users have been given points. Speculative and mysterious, points are an arbitrary representation of value that often leads to a disparity between expectations and reality when $KMNO allocations go out at the end of each season.

This time around, Kamino has opted to abolish points in favor of locked $KMNO, the platform’s native token. Over the next 3 months, Kamino has promised to transparently distribute 100M $KMNO tokens, currently valued at $5.1M, among users, with tokens claimable from November 6. Additionally, users can stake their existing $KMNO holdings for boosted rewards.

In an attempt to minimize the potential price impact of 100M tokens entering circulation (~4% of the current circulating supply), Kamino has gamified the distribution of rewards. 

$KMNO tokens earned in Season 4 can be claimed over a 6-month vesting period, with users who claim earlier in the schedule forfeiting a portion of their tokens. All forfeited tokens are collected in a bonus pool, which will be distributed among claimants who wait until the end of the vesting period to collect their $KMNO rewards. 

Initially, it appears that Kamino is directing the bulk of Season 4 $KMNO rewards to its Earn vaults. The Solana DeFi titan is heavily incentivizing stablecoin deposits, using $KMNO rewards to boost the APY of its stablecoin-based vaults from 4-6% to over 20%.

While the proposed 20% APY is appealing at face value, depositors should be aware that, in order to fully realize this yield, they won’t be able to access their $KMNO tokens until April 2026.

Kamino Claims Top Spot in Solana TVL Rankings

The launch of Season 4 comes as Kamino secures a highly coveted position at the top of Solana DeFi’s TVL rankings. According to DefiLlama, Kamino TVL has surpassed $2.9B, flipping long-time leader Jito. Kamino’s $SOL-denominated TVL now sits at an all-time high of 16.53M $SOL.

However, the battle for Solana’s DeFi TVL is expected to reach a fever pitch in the coming weeks. Jupiter Lend has just opened the doors to its private beta, which is still undergoing final audits and currently has deposit caps in place. Following its full public launch later in August, Jupiter’s TVL could reasonably expect to see significant inflows of capital.

Likewise, Jito has been making successful inroads at an institutional scale. $jitoSOL, the protocol’s native LST, has been adopted by REX-Osprey’s Solana Staking ETF ($SSK) and now makes up a small portion of its AUM. If Solana ETFs are approved in the coming months, $jitoSOL could witness tremendous inflows as issuers seek liquid staking rewards for their ETFs.

Holders Concerned by Lack of Token Utility

While Kamino’s loyal users are understandably excited about earning $KMNO tokens and transparently tracking their rewards instead of ambiguous points, others have raised questions about what $KMNO is actually used for.

While most Solana ecosystem tokens are steadily adopting programmatic buybacks and other value accrual mechanisms, $KMNO is yet to implement a similar feature. At present, $KMNO’s only tangible utility is that it can be staked to earn more $KMNO.

Despite its perceived role as a governance token, no proposal pertaining to any aspect of Kamino’s governance or operation has ever been created.

$KMNO’s apparent lack of utility beyond accumulating more $KMNO has left a bad taste in the mouths of some holders, who eagerly await some kind of value accrual mechanism for the asset.

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