The Jito protocol on Solana has reached a remarkable milestone, surpassing $100 million in monthly revenue, significantly fueled by maximum extractable value (MEV). This impressive achievement showcases the vibrant growth of the Solana blockchain, with a staggering 93% of its validators participating in this initiative.
The year 2024 has proven pivotal for Solana, particularly with the Jito protocol’s extraordinary performance. According to Kairos Research, revenue from priority fees and tips on the Jito platform exceeded $100 million during November and December. This triumph not only highlights the rising popularity of the Solana network but also emphasizes the successful application of MEV.
So, what exactly is MEV? It refers to validators’ ability to enhance their profits by prioritizing specific transactions during the process of block creation. While this might increase transaction costs slightly for users, it leads to faster and more reliable transaction executions. Interestingly, for the first time, Solana validators have outperformed their Ethereum counterparts in MEV earnings. As per Dune Analytics, transaction fees on the Solana network nearly tripled throughout the year, jumping from around 60,000 SOL per day in January to over 150,000 SOL by October.
The Jito software, utilized by over 93% of Solana validators, has been instrumental in skyrocketing these earnings. It optimizes validator profits, strengthening Solana’s position as a leader even in bearish market conditions.
A significant innovation from Jito is the liquid restaking token known as JitoSOL. This feature enables users to leverage staked tokens as collateral for securing other protocols, enhancing their yield potential. The total value locked (TVL) in Jito has surged to nearly $2.75 billion, making it the most popular DeFi protocol on Solana, according to DefiLlama. In October, holders of the JTO governance token voted to allocate 0.15% of tip revenues to JitoSOL restakers. This innovation not only rewards committed users but also builds greater trust among investors in the protocol.
Despite Solana’s success, Ethereum still leads the staking and liquid restaking arena, with its main restaking protocol, EigenLayer, boasting a TVL of nearly $15 billion. However, Solana is rapidly positioning itself as a formidable competitor, thanks to its innovative strategies aimed at attracting more validators and investors.
With JitoSOL restakers enjoying returns of 8.6% and a command on maximizing validator earnings, Solana appears ready for continued growth, irrespective of market conditions. The potential expansion of MEV opportunities and liquid restaking may firmly establish Solana as one of the foremost global blockchain platforms.
Looking ahead, the future seems optimistic for both Jito and the broader Solana ecosystem, as they push the envelope on innovation in decentralized finance. With a solid validator base and advanced technology, Solana stands poised to set new benchmarks for the blockchain sector overall.
