Jupiter's Lend v2 lets the same deposit earn twice

Jupiter, the Solana-based DEX aggregator behind the JUP token, launched a lending product called Lend v2 on Monday. The update lets a single deposit earn lending interest and a share of swap fees at the same time, CoinDesk reports.

Two features drive the change. Smart Collateral pairs deposits, currently USDC, USDT, SOL, and JupSOL, into correlated liquidity pools that generate trading fees on top of lending interest. Smart Debt applies the same logic to borrowed assets, so a loan itself earns fees that offset its cost. Both features build on Fluid, the Ethereum lending protocol Jupiter Lend runs on; Fluid introduced Smart Collateral and Smart Debt for its own exchange first, and Jupiter is now exposing that design to its own users.

“There's been a wall between the two primary ways people earn APY onchain, lending and LPing.”

— Kash Dhanda, COO, Jupiter

The extra yield depends on how much swap volume Jupiter's router sends through the new vaults. Dhanda said returns improve as the vaults attract more trading, which means the arrangement works better for popular pairs than for quiet ones. The design also carries an uneven risk: if one asset in a correlated pair depegs, the protocol shields borrowers by rebalancing their position automatically, while liquidity providers on both sides absorb the loss. Jupiter limits the feature to closely correlated pairs, stablecoin against stablecoin or SOL against staked SOL variants, to keep that risk contained.

Jupiter Lend held about $1.9 billion in deposits and $822.7 million in active loans as of Monday, according to DefiLlama and Token Terminal data cited by CoinDesk. Loan volume has run between $600 million and $900 million since September, and the protocol collected $1.6 million in fees over the past 30 days, a rough 1% annualized yield before any revenue split.

• Smart Collateral and Smart Debt let deposits and loans double as router liquidity
• Extra yield tracks swap volume through the new vaults, not a fixed rate
• Jupiter Lend: about $1.9B in deposits, $822.7M in active loans as of Monday

Squeezing more use out of the same deposited capital is a pattern showing up across DeFi this year: we covered a similar approach in XRP as DeFi collateral: Ripple's RLUSD lending play via Flare, Morpho. Readers newer to Solana's asset layer can find the basics Jupiter Lend builds on in our explainer on SPL tokens and Solana wallets.

This piece is informational, not a recommendation to buy, sell, or hold any asset.