What is Jito? Exploring the Premier Liquid Staking Platform on Solana

1. What is Jito?

Jito is a project with a primary focus on developing Liquid Staking solutions within the Solana blockchain framework. Liquid Staking allows users to deposit their tokens into a designated protocol and receive an equivalent form, termed staked tokens, which enables them to participate in staking activities and earn rewards from the network's security mechanisms.

Through engagement with Jito's Stake Pool, participants can stake their SOL tokens and obtain JitoSOL tokens in exchange. JitoSOL tokens serve to enhance liquidity for users, enabling them to utilize them across various transactions and applications within the Solana network.

2. Operation Mechanism of Jito

2.1. How Jito Works

Jito operates in several steps:

Depositing SOL and Receiving JitoSOL: Users deposit SOL tokens into Jito's pool and receive JitoSOL tokens in return. JitoSOL tokens represent the staked SOL tokens.
Delegating SOL to MEV-Capable Validators: Jito's pool delegates users' SOL tokens to validators capable of extracting Miner Extractable Value (MEV).
Validators Auction Block Space: Validators participate in auctions to secure block space on the Solana network. They receive MEV rewards as incentives.
Redistributing MEV Rewards: MEV rewards obtained by validators are distributed back to the Jito Stake Pool as supplementary rewards. This boosts the Annual Percentage Yield (APY) for users staking SOL in the pool.
Accumulating JitoSOL Rewards: Users' JitoSOL tokens accumulate both staking rewards and MEV rewards, increasing the overall value of their assets.

In summary, Jito enables users to deposit SOL tokens into the pool and receive JitoSOL tokens. The pool delegates SOL to validators who secure block space and earn MEV rewards, which are then redistributed to users. Users' JitoSOL tokens accumulate rewards, enhancing their asset value.

As of writing, Jito has received over 6 million SOL deposits from 37,777 users and operates with a network of 83 validators. It ranks second in Total Value Locked (TVL) within the Solana ecosystem, with a TVL of $352.73 million.

2.2. JitoSOL and MEV

2.2.1. JitoSOL

JitoSOL represents a derivative asset within the realm of liquid staking on the Solana blockchain. It allows users to exchange their SOL tokens for JitoSOL, which in turn facilitates participation in decentralized finance (DeFi) activities while still benefiting from staking rewards.

Holding JitoSOL enables users to engage in various DeFi platforms, such as lending on Solend or providing liquidity on Raydium. Notably, JitoSOL also offers additional rewards generated from transaction revenues associated with Miner Extractable Value (MEV) extraction on the Solana network.

Users can obtain JitoSOL through the jito.network website by exchanging their SOL tokens. The website also enables flexible trading of JitoSOL for other tokens on decentralized exchanges like Jupiter. Additionally, users can withdraw funds from JitoSOL back to SOL after a brief waiting period.

The value of JitoSOL increases based on accumulated profits, rather than continuous distributions. For instance, as accrued profits rise, so does the value of JitoSOL. This ensures that all holders of JitoSOL receive proportional profits, regardless of their storage method. Furthermore, JitoSOL accrues value from MEV rewards, enhancing its overall value.

2.2.2. MEV

MEV, or Maximal Extractable Value, denotes the potential profit opportunities arising from executing transactions in a specific sequence within a blockchain network. An example of MEV includes exploiting price disparities resulting from large transactions on trading platforms like Orca.

Another instance of MEV involves leveraging opportunities presented by significant account liquidations on platforms like Solend. Jito Foundation endeavors to mitigate adverse MEV effects, enhance transparency, and equitably distribute profits. To achieve this, Jito has introduced an open-source validator manager aimed at fostering a competitive environment for MEV extraction.

This manager facilitates auction sessions in each block to capture MEV rewards. Bidders compete to win MEV, with successful bids being rewarded. The proceeds from these bids are predominantly directed towards participating depositors, such as JitoSOL holders. This incentivizes staking and network security on Solana while minimizing spam bots.

2.3. Jito Points and Jito Referral Program

Jito Points serve as a reward mechanism to incentivize JitoSOL holders and users. These points can be earned through three primary avenues:

Holding JitoSOL in one's wallet, where each JitoSOL held accrues a certain number of points daily.
Using JitoSOL on various DeFi platforms, such as providing liquidity in different pairs or participating in yield farm products.
Referring others to the Jito platform, where users earn a percentage of the points accumulated by their referrals.

The Jito referral program encourages user engagement and platform growth by rewarding users for introducing others to the platform.

3. Team

Updating

4. Partnerships and Investors

Jito secured $12 million through two funding rounds from investment firms such as Delphi Digital, Multicoin Capital, Robot Ventures, Alameda Research, and Framework Ventures.

5. Tokenomics

The project disclosed its tokenomic details on November 28, 2023, allocating 10% of the total supply for an airdrop to users.

5.1. General Information

Token Name: Jito
Token Symbol: JTO
Total Supply: 1,000,000,000 $JTO
Initial Circulating Supply: 115,000,000 $JTO
Initial Float Supply: 583,000,000 $JTO

5.2. Token Allocation

Community Growth: 34.3%
Ecosystem Development: 25%
Investors: 16.2%
Core Contributors: 24.5%
Airdrop: 10%

The airdrop snapshot was taken on November 25, 2023. It will be distributed to Jitosol holders, Solana validator operators running Jito-Solana MEV clients, and members using JITO Network's MEV programs. 10% of the total supply is designated for the airdrop, with 90,000,000 JTO tokens distributed immediately and an additional 10,000,000 JTO tokens gradually distributed over one year. Information on claiming tokens will be updated by the project.

5.3. Token Features

JTO token holders possess governance rights over the project.
They can set fees for the JitoSOL stake pool and update delegation strategies for StakeNet programs.
They manage funds of JTO tokens held by the DAO and fees generated from JitoSOL.
They contribute to the development and continuous improvement of Jito protocols and products.

6. Roadmap

Updating

7. Project infomation

Website: https://www.jito.network/
Twitter: https://twitter.com/jito_sol

8. Conclusion

Jito operates as a Liquid Staking platform on the Solana blockchain, offering a means for SOL token holders to generate additional income through staking activities. At present, the project does not possess its native token but instead employs a point-based reward system for user engagements on the platform. There is a strong likelihood that these accrued points will be converted into tokens for distribution to users in the future, coinciding with the project's token launch.

The presented discourse furnishes a comprehensive depiction of the Jito initiative, purveyed by Theblock101. It is anticipated that this analysis will afford readers a holistic understanding of the project.

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