The post Solana (SOL) Ecosystem in Turmoil: Two Protocols Collide, Solana Foundation Issues Statement appeared on BitcoinEthereumNews.com. Discussions on the Jupiter Lend vault design, one of the most talked-about topics in the Solana ecosystem, escalated further over the weekend. Kash Dhanda, Jupiter Exchange’s chief operating officer, released a video statement addressing community concerns regarding the protocol’s lending product, acknowledging that claims of “zero risk of contagion” circulating on social media are “not 100% accurate.” Dhanda noted that some previous posts had portrayed Jupiter Lend’s vaults as “isolated risk,” with one post even stating that “cross-contamination is completely eliminated.” This post was subsequently deleted by the Jupiter team due to backlash. Dhanda said in his statement: “The post we described as having zero risk of infection was completely inaccurate. We wanted to delete it to prevent further spread, but in hindsight, we should have issued a correction at that time.” The controversy was sparked by Fluid co-founder Samyak Jain’s announcement that Jupiter Lend uses rehypothecation for capital efficiency. This means collateral users deposit into vaults can be reused elsewhere within the protocol, meaning the collateral isn’t completely isolated. According to Jain, Jupiter Lend vaults can still be considered “isolated” because each vault has its own configuration, limit, liquidation threshold, and penalty rate. However, this structure does not prevent collateral reuse due to the shared liquidity layer. Dhanda also confirmed the use of rehypothecation, saying, “This mechanism is why these collateral generates returns.” However, Dhanda argued that the vaults are still “internally isolated.” Marius Ciubotariu, co-founder of rival Solana lending protocol Kamino, publicly criticized Jupiter Lend’s design. Kamino recently blocked Jupiter’s financial instrument from accessing Kamino positions. Ciubotariu argued that funds from a user who had pledged SOL collateral were being sent to loop trades and other risky positions, writing: “There’s no isolation here, just complete cross-contamination. Contrary to what’s advertised.” As the debate escalated, Solana Foundation President Lily… The post Solana (SOL) Ecosystem in Turmoil: Two Protocols Collide, Solana Foundation Issues Statement appeared on BitcoinEthereumNews.com. Discussions on the Jupiter Lend vault design, one of the most talked-about topics in the Solana ecosystem, escalated further over the weekend. Kash Dhanda, Jupiter Exchange’s chief operating officer, released a video statement addressing community concerns regarding the protocol’s lending product, acknowledging that claims of “zero risk of contagion” circulating on social media are “not 100% accurate.” Dhanda noted that some previous posts had portrayed Jupiter Lend’s vaults as “isolated risk,” with one post even stating that “cross-contamination is completely eliminated.” This post was subsequently deleted by the Jupiter team due to backlash. Dhanda said in his statement: “The post we described as having zero risk of infection was completely inaccurate. We wanted to delete it to prevent further spread, but in hindsight, we should have issued a correction at that time.” The controversy was sparked by Fluid co-founder Samyak Jain’s announcement that Jupiter Lend uses rehypothecation for capital efficiency. This means collateral users deposit into vaults can be reused elsewhere within the protocol, meaning the collateral isn’t completely isolated. According to Jain, Jupiter Lend vaults can still be considered “isolated” because each vault has its own configuration, limit, liquidation threshold, and penalty rate. However, this structure does not prevent collateral reuse due to the shared liquidity layer. Dhanda also confirmed the use of rehypothecation, saying, “This mechanism is why these collateral generates returns.” However, Dhanda argued that the vaults are still “internally isolated.” Marius Ciubotariu, co-founder of rival Solana lending protocol Kamino, publicly criticized Jupiter Lend’s design. Kamino recently blocked Jupiter’s financial instrument from accessing Kamino positions. Ciubotariu argued that funds from a user who had pledged SOL collateral were being sent to loop trades and other risky positions, writing: “There’s no isolation here, just complete cross-contamination. Contrary to what’s advertised.” As the debate escalated, Solana Foundation President Lily…