Kamino Finance is changing some parameters to gain points ahead of its KMNO airdrop, scheduled for April.
The turnaround will pay off for longtime Kamnio users, but key details are still missing.
It’s not that easy to give out cryptocurrencies for free nowadays. This seemingly paradoxical reality has arrived for the Solana-based Kamino Protocol, which on Monday revised the mechanisms it plans to use for its upcoming airdrop of the KMNO token.
The new rules will offer additional, though unspecified, rewards to “OG” users of Kamino, which hosts various decentralized finance (DeFi) products for borrowing, lending, staking and earning interest on Solana tokens. Point earning strategies will also be reduced, Kamino said in a post on X, formerly Twitter.
“We hear you,” Kamino’s account posted mid-Monday, seeking to quell four days of backlash from users since it announced details of its airdrop, scheduled for April.
The turnaround highlights the profits and dangers of using points to divvy up tokens on Solana: These mechanisms provide protocols with a way to quantify their users’ contributions and a means for those users to measure their own rank compared to all the others. But it also opens the door to gaming the system, especially when those responsible are overly transparent. This is exactly what happened for Kamino.
The protocols usually don’t tell users the full rules of the points system before everyone has finished playing it. This ambiguity can be frustrating but limits opportunities to game the system. Kamino, which announced its points program immediately after Jito’s launch, they avoided this mantra; he played with an open hand instead.
The April Kamino airdrop
Earlier this month Kamino confirmed that it was on the verge of rewarding its users with a plane-dropped token and scheduled distribution for April. As expected, Kamino said it will tie user allocations to the number of points accumulated by borrowing, lending and participating in its various DeFi products.
Many people have been waiting for this news for a long time and have tied up thousands of dollars in cryptocurrencies on Kamino to earn points and get more KMNO tokens. But the airdrop announcement shook up their calculations, tying their future allocations solely 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 has increased 69% over the past five days to nearly $900 million. according to DeFiLlama. This jump can be attributed to increased deposits from traders who took advantage of the remaining weeks before Kamino said he would take the snapshot.
Although late to the party, these new depositors were likely trying to get a good position in the April airdrop by accumulating large sums in the numerous token products that Kamino incentivizes with extra points. They could do so with more certainty than is usually found in the murky world of points-for-air launches: Last week Kamino said he would distribute tokens in a “linear” way, meaning based solely on how many points you have.
On the one hand, it makes sense that a protocol like Kamino uses linear patterns for its airdrop. When Jito did it The highly successful JTO airdrop in December used a tiered model that gave big rewards to users with many accounts. Linear models eliminate this type of play. But publicly confirming the model, and giving everyone extra weeks to try it, left Kamino vulnerable.
The new rules will reduce the impact of newcomer deposits, if only slightly. Starting Tuesday, Kamio will no longer offer enticing boosters in escrow across a wide range of its products and will instead stick to SOL and stablecoins, tokens sought after by most users. Pools that earned 5x more points will now earn fewer points under the new rules.
A little less clear is what Kamino will do for its “OG” users. In his post on Monday, Kamino said that he would distribute additional tokens “to users who have used Kamino the longest,” without defining this category or saying how much they would get.
