Loyal Earn risks, in plain terms
Earn lends your stablecoins on Kamino from your own Squads smart account. This page lists every way that can lose money, what the automation is allowed to do, and what it can't.
What the automation can do
Withdraw from a whitelisted Kamino reserve
Deposit into a whitelisted Kamino reserve
Everything else is blocked
Your keys never leave you
Where the risk sits
Every layer your deposit touches, what could go wrong there, and how far it can reach.
| Layer | What could go wrong | How far it reaches |
|---|---|---|
| Kamino lending reserves | A smart-contract bug, or bad debt if a borrower's collateral in that market fails and liquidation doesn't cover the loan. When a reserve is fully borrowed, withdrawals wait until liquidity returns. | Earn only uses five isolated Kamino markets. A problem in one market doesn't reach deposits in another. Same exposure as supplying to Kamino yourself. |
| The stablecoin you deposit | The coin loses its peg, or the issuer freezes it. | Earn keeps your allocation in the stablecoin you deposited. It doesn't swap you into other dollars. |
| Squads Smart Account program | A bug in the program that holds your account and enforces the policy. | Audited by OtterSec and used across Solana. Loyal doesn't modify it. |
| Loyal's automation | It picks a lower-paying reserve, or stops rebalancing if Loyal's servers go down. | The worst case is a lower rate. The on-chain policy only lets it withdraw from and deposit into whitelisted Kamino reserves, with your account as the owner on both sides. |
| Loyal the company | Loyal shuts down. | Your funds stay in your smart account. Any Solana client, including the CLI, can withdraw them. |
Compared with the alternatives
Earn has the same lending risk as supplying to Kamino directly. The differences are custody, rate and track record.
| Property | Loyal Earn | Kamino directly | Aave, supply only | Exchange earn product |
|---|---|---|---|---|
| Who holds the funds | You, in your own smart account | You | You | The exchange |
| Lending-contract risk | Kamino | Kamino | Aave | Whatever the exchange uses, undisclosed |
| Leverage or liquidation | None, supply only | None if you only supply | None if you don't borrow | Depends on product |
| Extra layer on top | Automation bounded by an on-chain policy | None | None | Exchange solvency and withdrawal limits |
| Rate | Best whitelisted reserve, rebalanced automatically | The one reserve you picked | The one market you picked | Set by the exchange |
| Live since | October 2025 | 2023 | 2020 | Varies |
The five markets Earn uses
Whitelisted markets
Nothing riskier gets added quietly
Check the markets yourself on kamino.finance.
Track record
Zero incidents
Live assets under management
Audits
Questions?
Answers.
Loyal Earn carries the risk of supplying stablecoins to Kamino, plus a bounded automation layer. Your funds stay in your own Squads smart account, and an on-chain policy lets the automation do exactly two things: withdraw from and deposit into whitelisted Kamino reserves. The remaining risks are a Kamino reserve failing, the stablecoin losing its peg, and a Squads program bug. No user funds have been lost since launch in October 2025.
Not in Loyal Earn today. Earn runs on two externally audited programs: the Squads Smart Account program, which holds your account and enforces the policy, and Kamino K-Lend, which pays the yield. Loyal's own code is the off-chain automation and the apps, which are open source.
Route your deposit to a lower-paying whitelisted reserve, or stop rebalancing if Loyal's servers go down. It can't send funds out of your smart account, borrow, trade into other tokens, or change its own policy, because the Squads program rejects any transaction outside the policy.
The lending risk is the same, because your stablecoins sit in the same Kamino reserves. Earn adds an automation layer that can only move funds between whitelisted reserves inside your own account. In exchange, you get the best-paying reserve without watching rates yourself.
There's no lock-up, and you can withdraw any time. The one limit comes from Kamino: if a reserve is fully borrowed, withdrawals from it wait until borrowers repay or new deposits arrive. That applies to every lender in the reserve, not only Loyal users.
Loyal Earn has no audit of its own because it has no smart contract of its own to audit. A security audit reviews on-chain program code, and Earn deploys none. Your funds sit in the Squads Smart Account program and earn in Kamino K-Lend, both audited by OtterSec. What Loyal adds is a policy: configuration stored in your Squads account and enforced by the audited Squads program, listing the two instructions the automation may call (deposit and withdraw) and the Kamino reserves it may call them on. Anyone can read it on-chain. Loyal's off-chain automation is open source and hasn't been audited, but it can only submit transactions the policy allows, so a bug in it can't move funds out of your account.
Not automatically yet. Loyal Watchdog, in development with Webacy, will watch connected protocols for health drops and hack signals and pull funds back into your own account through a whitelisted policy. Until it ships, a Kamino exploit affects Earn deposits the same way it affects any Kamino lender.