Kamino launched a Solana lending market on Sept. 24 that lets holders of sUSDai borrow Circle's USDC against their positions at up to 80% loan-to-value, with liquidations triggered at an 85% threshold.

The market, curated by risk specialist Allez Labs, marks the first venue for borrowing against sUSDai — the yield-bearing, staked form of USD.AI's GPU-loan-linked stablecoin — since the issuer expanded the token to Solana earlier in the week. USD.AI said in a Sept. 24 post that "USDai and sUSDai are live on @solana," establishing the onchain footprint that Kamino's market now leverages.

Per-market supply caps are set at 5 million sUSDai and 5 million USDC, with a matching 5-million USDC borrow cap. sUSDai itself cannot be borrowed. Kamino frames the design as a way for sUSDai holders to access liquidity without forfeiting the yield embedded in the token's accrual mechanism.

How does the market work?

Borrowers deposit sUSDai and draw USDC against it. Kamino's Multiply product enables up to five-times exposure by recycling borrowed USDC into additional sUSDai supply. Base USDC rates at launch were 1.01% APY to borrow and 0.21% APY to supply, before incentives. Kamino announced "$75K in rewards will be distributed over the next two months" to USDC suppliers and borrowers, layering a temporary yield boost on top of the variable lending rate.

Kamino's API on Sept. 24 showed roughly $360,000 of sUSDai supplied and $1.20 million of USDC supplied, with about $284,000 of USDC borrowed. That put utilization of the USDC pool at 23.7% on day one — modest by DeFi lending standards, where active markets routinely run above 70%.

What actually backs sUSDai?

USDai is, at the protocol level, backed 1:1 by PayPal-issued PYUSD, according to USD.AI's documentation. Staking USDai produces sUSDai, whose exchange rate against the underlying reflects a portfolio of GPU-backed loans, reserves, escrow balances, fees and any impairments booked against the vault.

The credit framework underneath pairs onchain loan accounting with offchain rights over physical GPU hardware. Default resolution therefore depends on legal process, not autonomous smart-contract liquidation. In August, The Defiant reported that crypto exchange Bullish had extended USD.AI a $100 million stablecoin debt facility to finance the GPU-backed lending book — the institutional scaffolding behind the onchain collateral.

What credit risks do lenders carry?

Kamino isolates sUSDai exposure within a market carrying its own LTV and liquidation parameters, but the wrapper does not absorb the underlying credit exposure. USD.AI's documentation states that any shortfall remaining after a loan resolution is recorded as an impairment in the vault's net asset value, reducing the value of every outstanding sUSDai proportionally.

An sUSDai depositor at Kamino therefore holds two layered claims: a senior, overcollateralized position against their own USDC borrow, and a residual, subordinated exposure to the vault that ultimately funds their collateral. Recovery on the second layer depends on the performance of borrowers USD.AI has underwritten offchain.

What to watch next?

The reward program runs roughly 60 days, and the supply caps leave room for the USDC pool to grow more than four-fold from current levels. The structural test will be whether utilization climbs as the GPU-credit thesis draws in leveraged demand — and whether USD.AI's offchain enforcement machinery can keep pace if defaults arrive before the onchain market matures.