From theblock by Daniel Kuhn

Quick Take

Kamino, the largest decentralized exchange on Solana

SOL -3.62%, is launching new swap feature, according to Kamino co-founder Marius Ciubotariu — who shared the news on stage at The Block’s Emergence conference in Prague on Thursday.

According to Ciubotariu, the platform will be “intents-based,” a relatively new design in the world of DEXs that enables users to request various app interactions, like moving funds or executing trades.

Kamino Swap, currently live in beta, aims to solve inefficiencies in the current Solana exchange landscape — including network congestion, account lock limits and slippage.

The product will tap real-time data provider Pyth Network to offer what Ciubotariu said will be the lowest prices for any Solana-based asset — for both liquidators and traders — and the lowest fees.

As part of his presentation, Ciubotariu ran a demonstration by swapping tokens simultaneously on Kamino and its centralized competitor Coinbase, the latter of which was notably slower. 

The platform was initially developed to improve Kamino Lend’s efficiency and profitability. In particular, the team wanted to create a more competitive limit order venue to improve the liquidation process. Ciubotariu also noted that, under the previous paradigm, liquidators required costly custom codes and incentives to be onboarded, which added extra costs.

To solve these issues, when a user places a trade, Kamino Swap will broadcast the request to a network of “searchers” — i.e. bots that seek out maximal extractable value (MEV) by bundling transactions that are then sent to a “builder” that creates the blocks —  who then compete in an auction to execute the transaction at the best price.

“It is through the heavy competition of solvers, outbidding each other to win the trade, that the user gets the best price for their swap,” the team wrote in a governance post. 

Users will select a desired price or range when trading and even receive a “tip” in SOL from searchers, which will be taken from the value that would have otherwise leaked to miners. Searchers must provide a tip to win a limit book auction. 

The beta version starts with SOL and USDC, with plans to include more tokens soon.