Fluid co-founder Samyak Jain has confirmed that the protocol's vaults engage in rehypothecation of collateral to enhance capital efficiency, contradicting previous claims of risk isolation. This practice allows SOL used as collateral to borrow USDC to be re-lent into looped positions such as JupSOL and INF, potentially exposing users to additional risks associated with these assets. The acknowledgment raises concerns about the true level of risk management within Fluid's operations.