An introduction to kTokens

kTokens are receipt tokens, representing the value deposited in Kamino vaults. Each Kamino vault has its own distinct kToken, which users will receive in their wallets the moment they deposit into a vault. kTokens also reflect the value of auto-compounding in Kamino vaults, making them Solana's first yield-bearing asset that accrues yield from concentrated liquidity positions.

How kToken values are determined

When a user deposits in a vault, the kTokens they receive will reflect their share in that vault. Each kToken will consist of both assets in the vault.
As kTokens represent a deposit in a vault, their value will also change based on changes to the deposit value. Kamino vaults auto-compound fees and rewards earned from the concentrated liquidity pools that the vaults are built on. This means that the auto-compounded fees and rewards will, over time, reflect in the value of a kToken.
Changes to the value of kTokens will not increase the actual number of kTokens in your position, but will be reflected directly in the value of the kTokens you already own.

kToken use cases

kTokens are standard SPL tokens, and can be used across Solana DeFi. The first kToken integration was with Hubble Protocol, where users can deposit their kUSDH-USDC tokens, which they will receive when depositing into Kamino's USDH-USDC Vault.
kTokens have incredible potential as a yield-bearing token, and can lend itself to many use cases due, in no small part, to the composability that Solana enables.