Risk Parameters

Risk parameters are how a curator expresses a thesis about an asset. They determine how much can be borrowed against it, when liquidations trigger, what the cost of borrowing is at each utilization level, and how much capital can flow into and out of the reserve. This page is a guide to choosing values. Every field documented here is in Reserve config reference; refer there for the full schema and defaults.

The relationship between LTV and liquidation threshold

loanToValuePct  <=  liquidationThresholdPct  <=  100

Field	What it does
`loanToValuePct`	Maximum borrowing capacity against the asset, as a percent of its USD value. A user with $1,000 of an asset at 75% LTV can borrow $750 of debt.
`liquidationThresholdPct`	The point at which the position becomes liquidatable. Must be `>= loanToValuePct`. The gap between the two is the liquidation buffer — the cushion a borrower has before being liquidatable.
`liquidationThresholdPct - loanToValuePct`	The buffer. Wider buffers reduce liquidation frequency at the cost of borrowing capacity.

Common reference points used across major Kamino markets:

Asset class	LTV	LT	Buffer
Major stablecoins (in stables-only group)	90–95%	92–97%	2–3%
Major liquid assets (SOL, BTC, ETH)	70–80%	75–85%	5–10%
LSTs paired with their underlying (eMode)	88–92%	90–95%	2–5%
Long-tail volatile assets	30–55%	50–70%	10–20%
Newly listed assets	Start conservative; widen later

These are reference ranges. Tune them to each asset based on its volatility profile, on-chain liquidity, oracle reliability, and historical depeg / recovery behavior.

Borrow factor

{ "borrowFactorPct": 100 }

A multiplier on the debt-side valuation of an asset. Borrowing 100 units of an asset with borrowFactorPct: 125 is treated as if you borrowed 125 units for risk purposes — making the position behave more conservatively.

borrowFactorPct	Effect
`100`	No adjustment. Default for stables and major assets.
`125`	Debt is treated as 25% larger than its market value. Use for assets where post-liquidation slippage is higher than typical.
`200+`	Aggressive overweight. Use for highly volatile or thinly traded debt assets.

The program enforces borrowFactorPct >= 100; values below have no effect.

The interest rate curve

{
  "borrowRateCurve": {
    "points": [
      { "utilizationRateBps": 0,     "borrowRateBps": 0 },
      { "utilizationRateBps": 7000,  "borrowRateBps": 500 },
      { "utilizationRateBps": 8500,  "borrowRateBps": 1500 },
      { "utilizationRateBps": 10000, "borrowRateBps": 8000 }
    ]
  }
}

The borrow rate is determined by reserve utilization (borrowed / deposited) using a piecewise linear curve. The curve must satisfy:

Exactly 11 points (pad with the final point repeated if you have fewer breakpoints)
utilizationRateBps strictly non-decreasing from 0 to 10000 (0% to 100%)
borrowRateBps non-decreasing across the curve
Rate between two breakpoints is linearly interpolated

Designing the curve

The economics of an IR curve hinge on the kink — the breakpoint where the rate starts climbing steeply.

Region	Purpose
`0% → kink`	Mild slope. Lets borrowers access cheap leverage when liquidity is abundant.
`kink → 100%`	Steep slope. Penalizes high utilization, pulls borrowers to repay and lenders to deposit.

For most assets, the kink sits at 70–85% utilization. The slope above the kink is what enforces solvency: at 95% utilization, depositors should earn enough that capital flows in; borrowers should pay enough that capital flows out. A common shape:

Utilization	Borrow rate
0%	0%
70%	5% (the kink)
85%	15%
100%	80%+

The exact numbers depend on the asset and demand. Stablecoins with steady deposit demand can run with kinks at 90% and tighter slopes; volatile or thinly-supplied assets need wider slopes to keep utilization in check.

Padding the array

The on-chain struct expects 11 points. If your curve has fewer real breakpoints, repeat the final point to fill:

{
  "points": [
    { "utilizationRateBps": 0,     "borrowRateBps": 0 },
    { "utilizationRateBps": 7000,  "borrowRateBps": 500 },
    { "utilizationRateBps": 10000, "borrowRateBps": 8000 },
    { "utilizationRateBps": 10000, "borrowRateBps": 8000 },
    { "utilizationRateBps": 10000, "borrowRateBps": 8000 },
    { "utilizationRateBps": 10000, "borrowRateBps": 8000 },
    { "utilizationRateBps": 10000, "borrowRateBps": 8000 },
    { "utilizationRateBps": 10000, "borrowRateBps": 8000 },
    { "utilizationRateBps": 10000, "borrowRateBps": 8000 },
    { "utilizationRateBps": 10000, "borrowRateBps": 8000 },
    { "utilizationRateBps": 10000, "borrowRateBps": 8000 }
  ]
}

Deposit and borrow caps

{
  "depositLimit": "1000000000000",
  "borrowLimit":  "900000000000"
}

Limits are denominated in token base units (lamports for SOL, smallest unit for the token’s decimals).

Cap	Effect
`depositLimit`	Hard ceiling on total deposits. New deposits beyond this revert. Set higher than `borrowLimit` to leave a withdrawal buffer.
`borrowLimit`	Hard ceiling on total borrows. New borrows beyond this revert.

A common pattern for new reserves:

Phase	depositLimit	borrowLimit
Initial listing	Conservative (e.g., $1M equivalent)	80–90% of `depositLimit`
After 30 days of clean operation	2–5× initial	Same ratio
Steady state	Asset-specific; track asset’s on-chain liquidity	Same ratio

borrowLimit < depositLimit ensures there is always some unborrowed liquidity (subject to live withdrawals). borrowLimit == depositLimit allows full utilization but means depositors may need the withdrawal queue to redeem. A focused command exists for adjusting just the borrow cap:

yarn kamino-manager update-reserve-config-debt-cap \
  --reserve <RESERVE_ADDRESS> \
  --mode multisig \
  --multisig <SQUADS_MULTISIG_PUBKEY>

Utilization-based borrow blocking

{ "utilizationLimitBlockBorrowingAbovePct": 80 }

Blocks new borrows once utilization exceeds the configured percentage. 0 disables. Useful as a softer alternative to borrowLimit for reserves where you want to throttle leverage at high utilization without capping total deposits. Example: utilizationLimitBlockBorrowingAbovePct: 90 means borrows revert when utilization is above 90%, while existing borrows and repayments continue unaffected.

Fees

{
  "fees": {
    "borrowFee": "0",
    "flashLoanFee": "0"
  },
  "protocolTakeRatePct": 0,
  "protocolLiquidationFeePct": 0,
  "protocolOrderExecutionFeePct": 0
}

Fee	Charged on	How it accrues
`fees.borrowFee`	Origination of every borrow, as a decimal string (e.g. `"0.001"` = 0.1%)	Added to borrow’s debt at origination
`fees.flashLoanFee`	Each flash loan	Charged in the same instruction as the flash repay
`protocolTakeRatePct`	Interest accrual on the reserve	Percentage (0–100) of accrued interest routed to protocol fees
`protocolLiquidationFeePct`	Liquidations	Percentage (0–100) of liquidation proceeds routed to protocol fees
`protocolOrderExecutionFeePct`	Filled obligation orders	Percentage (0–100) of filled order proceeds routed to protocol fees

Default for curator markets: all zero. Curator-set fees go to the curator-controlled lending_market_owner via redeem_fees.

Reserve status

{ "status": 0 }

Value	State	Meaning
`0`	Active	Normal operation
`1`	Obsolete	Deprecated — the program treats this similarly to active for existing positions but signals to integrators not to surface for new activity
`2`	Hidden	Hidden from default UIs

Most reserves stay at 0. Use 1 when phasing out a reserve while honoring existing obligations.

Putting it together: a checklist for a new reserve

Pick LTV and liquidation threshold

Use comparable Kamino reserves as a starting reference. For a never-listed asset, start more conservatively than analogues and widen later.

Set borrow factor

100 for major assets and stables. 125+ for assets with thinner exit liquidity.

Design the IR curve

Pick a kink (typically 70–85% utilization). Set base rate at the kink (3–8% for stables, 5–15% for volatile assets). Set max rate at 100% utilization (40–80% APR is common).

Choose caps

depositLimit proportional to the asset’s verified on-chain liquidity. borrowLimit 80–90% of depositLimit.

Set fees

protocolTakeRatePct = 0–20% if you want the curator to capture interest revenue. Origination fees default to 0 for most consumer-facing reserves.

Configure the oracle

Scope is the default. Set TWAP and staleness guards. → Configure oracles

Decide on advanced features

eMode? Auto-deleverage? Withdrawal queue? Fixed-term? Each is opt-in. → Lifecycle

Reference

Reserve config reference — every field documented
Liquidations — what happens when LT is breached
Elevation groups — relaxed parameters for correlated assets

Get started

Market setup

Reserve setup

Optional features

Day-2 operations

Data & integration

Reference

The relationship between LTV and liquidation threshold

Borrow factor

The interest rate curve

Designing the curve

Padding the array

Deposit and borrow caps

Utilization-based borrow blocking

Fees

Reserve status

Putting it together: a checklist for a new reserve

Reference

​The relationship between LTV and liquidation threshold

​Borrow factor

​The interest rate curve

​Designing the curve

​Padding the array

​Deposit and borrow caps

​Utilization-based borrow blocking

​Fees

​Reserve status

​Putting it together: a checklist for a new reserve

​Reference

The relationship between LTV and liquidation threshold

Borrow factor

The interest rate curve

Designing the curve

Padding the array

Deposit and borrow caps

Utilization-based borrow blocking

Fees

Reserve status

Putting it together: a checklist for a new reserve

Reference