Jupiter, the Solana-based crypto exchange, found itself under scrutiny after a top executive admitted that its marketing claims about "zero risk of contagion" in its lending product,

Lend, were misleading. Kash Dhanda, Jupiter's COO, acknowledged in a video statement on X that prior posts were not fully accurate and had been removed to prevent further controversy . The admission followed criticism from other lending platforms, including , which blocked Jupiter Lend's migration tools, citing concerns over risk disclosure .

The dispute centers on Jupiter Lend's vault structure, which the platform initially described as offering "isolated risk." Some promotional posts even claimed that "pairs don't cross-contaminate, removing any risk of contagion"

. However, rival platform Kamino's co-founder argued that Jupiter Lend's use of rehypothecation-where collateral is reused across multiple vaults-undermines the notion of full isolation . Jupiter's Dhanda admitted the rehypothecation practice exists but defended it as necessary for capital efficiency and yield generation .

Industry insiders and competitors quickly took to social media to criticize Jupiter for its messaging. Samyak Jain, co-founder of Fluid-a company that provides backend infrastructure for Jupiter Lend-confirmed the use of rehypothecation and acknowledged that assets in Jupiter Lend's vaults are not "completely isolated"

. Meanwhile, Kamino's Marius Ciubotariu accused Jupiter of misleading users about the risks, pointing to scenarios where a user supplying SOL and borrowing could face exposure to volatile, rehypothecated assets .

Why the Standoff Happened

The controversy erupted after several promotional posts by Jupiter were deleted and replaced with more cautious messaging. The company had previously highlighted its "dynamic limits to isolate risk" as a key differentiator, especially after launching in August 2025 with loan-to-value ratios as high as 90%

. The aggressive marketing likely contributed to Jupiter Lend's rapid growth, with total value locked surpassing $1 billion . Kamino, which holds a significant market share on Solana, reacted by restricting Jupiter Lend's migration tools and publicly criticizing the lack of transparency .

Rehypothecation has long been a feature of DeFi lending platforms, but its implications for risk management remain contentious. Dhanda defended the practice, stating it is how yield on collateral is generated and is a common feature in traditional and decentralized finance

. However, the lack of clarity in how Jupiter Lend's vaults are structured has led to confusion and mistrust among users.

How Markets Reacted

The fallout from the controversy has raised questions about transparency and risk disclosure in DeFi. Jupiter's admission has prompted calls for clearer definitions of terms like "isolation" and "contagion" in lending protocols

. Meanwhile, Kamino has emerged as a vocal critic, reinforcing its position as a leader in open-source lending by blocking Jupiter Lend's tools .

Jupiter Lend, now under the spotlight, has not backed down entirely. Dhanda emphasized the protocol's performance during a major market crash in October 2025, citing "zero bad debt" as evidence of its resilience

. The company has also announced plans to release additional documentation and a clarifying video after the Solana Breakpoint conference in Abu Dhabi . Investors and users will be watching closely to see how the platform addresses these concerns and whether it can maintain its position in a highly competitive market.

What This Means for Investors

Investors in Jupiter and its lending product now face a higher degree of scrutiny. While Jupiter Lend's TVL has grown rapidly, the controversy may lead to a reevaluation of risk levels. The platform's ability to attract and retain users will depend on how well it addresses the concerns raised by competitors and the broader community

.

Additionally, Jupiter Asset Management, a separate entity with no direct relation to the crypto exchange, made headlines for increasing its stake in NVIDIA, holding 3,249,271 shares valued at $513 million

. The move highlights growing institutional interest in tech stocks, even as DeFi platforms like Jupiter face regulatory and reputational hurdles.

The broader DeFi landscape continues to evolve amid these challenges. As Solana's lending market becomes more competitive, platforms must balance innovation with transparency. For Jupiter, the path forward involves not only clarifying its risk model but also restoring trust in its messaging. Investors and users alike will be watching to see if the platform can maintain its momentum while addressing these critical concerns.