Jito, one of the key validators on Solana, is also turning into a re-staking hub. Deposits are now open for SOL and Solana-based liquid staking tokens.
Jito, the Solana validator, block builder, and staking protocol, will now add re-staking. Jito offers another tool to store SOL for passive income, while also finding an application for Solana’s liquid staking tokens.
1/ The time has come!🚨
Jito (Re)staking deposits are now LIVE 🥳 pic.twitter.com/FAUvrnKd9x
— Jito (@jito_sol) October 30, 2024
With re-staking, Jito aims to replicate Ethereum’s model, creating a new layer of security for additional projects. The preferred deposit assets will be SOL, as well as the tokens of Renzo Protocol, Kyros, Fragmetric, and others. Jito re-staking will partner with other key players in Solana like Helius, as well as Circle, the issuer of USDC.
Initially, Jito will limit deposits to $25M to ensure the sustainability of rewards and the viability of the protocol. The model recalls that of Eigen Layer, which started with limited deposits. Liquid staking and re-staking add to the native lockup of SOL tokens. In total, 67% of SOLs are staked as a way to offset inflation.
The introduction to liquid staking and re-staking will unlock the value of SOL, without having to sell. Jito will secure Solana-based projects, taking care of staking SOL and tokens, while offering additional DeFi capabilities.
Jito to distribute transaction rewards
The biggest impact of Jito is its ability for Maximum Extractable Value (MEV) block building on Solana. The increased demand for Solana transactions turned Jito into the third-largest fee producer, with $4.25M in daily income.
Jito MEV fees grew in the past month, after increased demand for SOL transactions and meme token trading. | Source: Dune Analytics
The Solana chain does not have an officially visible mempool, though Jito has published an informal list of transactions. That list is now hidden, but Jito can still arrange blocks to avoid sandwich attacks.
Jito receives peak fees and bribes for that activity and is able to redistribute some of the earnings to its SOL stakers. Jito works as a third-party validator with MEV income, additionally supplying its MEV activities to other validators.
The influence and importance of Jito for Solana’s activity is also one of the keys to its success as a re-staking protocol. Over its lifetime, Jito attracted more than 1.5M SOL in validator tips.
Additionally, the JitoSOL validator service locks in more than 13.7M SOL from 115,797 depositors, for an annualized earnings rate above 8%. In most of its history, Jito saw net inflows of SOL due to its favorable returns. Jito ended up holding more than $2.4B of value locked, around 30% of all deposits in the Solana ecosystem.
In the past few months, MEV tips have become a larger share of staked SOL rewards, reflecting the increased trading activity. The nature of MEV also means Jito is able to offer the best rewards by picking up and ordering transactions in blocks.
Jito remains key for successful DEX trading on Solana, hence its success in generating passive income. Jito not only offers retailers to stake SOL but also existing protocols with significant balances. Top Solana projects store their funds with Jito, including Kamino, Solend, Orca, and Meteora.
JTO tokens attempt a breakout
JTO has been trading in a tight range, hovering around $2.40. JTO open interest also increased in the past two weeks, getting close to a three-month high at $47M.
Despite the importance of the Jito MEV service, the native token remains sluggish. Most of the successes of the Solana ecosystem are reflected directly in SOL, with a much smaller interest in JTO as a utility token.
In the short term, JTO may rally if short positions are attacked. Despite the representation on Binance and Coinbase, JTO underperforms in the Solana ecosystem, lagging even behind meme tokens with a market cap of just $304M.
One possible reason for the underperformance is the low float of JTO. In early 2025, after a cliff unlocks, the supply of JTO will keep increasing. Only 17.33% of JTO is unlocked, with generous allocations to early investors. Early contributors will be eligible for more than 24% of the token supply, with continuous unlocks from 2025.
Jito Labs was created in 2022, with lead backing from Multicoin Capital. The project managed to raise $10M due to unfavorable market conditions but went on to become a key feature of Solana.
