JitoSOL is growing its influence after launching its plan to become a hub for Solana (SOL) re-staking. JitoSOL aims to repeat the success of Eigen Layer and is already drawing in more SOL in its vaults.
JitoSOL, one of the most influential entities on the Solana blockchain, aims to offer a version of re-staking focusing on Solana (SOL). Previously, JitoSOL also offered native staking as a validator, as well as liquid staking. Re-staking means JitoSOL will support a new ecosystem of projects, known as actively validated services (AVS).
Currently, JitoSOL holds close to 12M SOL in its liquid staking vault. The inflows accelerated in the past week, after the initial announcement of the re-staking protocol. JitoSOL set up its platform as open-source, currently undergoing code previews for safety.
JitoSOL draws in liquidity not only from retail, but mostly from other leaders in the Solana ecosystem. DEXs and other protocols, including the Jupiter aggregator, are among the top SOL stakers and holders of JTO tokens. As other Solana apps are also earners of fees, JitoSOL becomes a source of passive income. Kamino is the top source of vaults, through which stakers can also receive a part of JitoSOL’s fees. While most JitoSOL tips and fees go toward large entities, there is no barrier to entry in holding JTO tokens to receive a share of the MEV fees.
Everyone is holding $JitoSOL.
12M $SOL about to teleport to 20M.
— Jito (@jito_sol) August 13, 2024
Re-staking will create a new batch of Solana-based tokens, while the underlying asset will remain outside the market. This is one solution for Solana-based activity, which does not lead to direct SOL compensation for apps or other participants. Currently, Solana apps receive SOL as a payment, creating incentives to sell the asset to realize gains.
AVS can still be tokenized, while retaining their SOL vaults and only trading in liquid re-staking tokens. In the past week, Squads was among the first projects to show interest in building as an AVS while re-staking their assets to secure Solana.
At the peak of the market, Ethereum-based re-staking put more than $22B into the Eigen protocol.
JitoSOL among top Solana fee earners
JitoSOL is among the top Solana entities, carrying $1.7B in total value locked. The value fluctuates based on the market price of SOL, but in terms of tokens, JitoSOL has seen non-stop inflows in the past two quarters. JitoSOL makes up around 30% of the value on Solana, which is now at $4.7B based on market valuations.
The protocol also draws in up to $588M in annualized fees, turning into one of the biggest SOL earners. To compare, the highly popular Pump.fun has around $486M in annualized fees, based on current activity.
JitoSOL currently draws in users from its block-building services, with up to 392K users on a busy day. The protocol has 108,529 long-term holders of its JTO token, issued in exchange for liquid staking.
JTO tokens are key for fee redistribution
JitoSOL also has its own selection of 213 validators, which redistribute the protocol’s MEV fees. Holding JTO means end users can redistribute a part of the JitoSOL fees. Validators on Jito run auctions on block space, receiving special tips to include transactions in blocks. Jito has become a key element of the Solana chain, as its services aim to solve the problem of failed transactions.
Most SOL is still held in native staking, with just 6.4% locked in liquid staking. Staking has shifted its balances in the past month, with outflows from former leader mSOL and into Jito and Jupiter’s vaults. More than 387M SOL is staked in total, cutting into the circulating supply of 466M.
In early 2025, the profile of JTO tokens will start changing. The new year will arrive with a large cliff unlock for early investors in Jito. Only 15.3% of JTO are unlocked, and the protocol may seek ways to put those tokens to work and avoid selling. JTO traded at $2.54, after recovering from a recent low at $2.13. JTO peaked during the 2024 bull market at close to $5.
Cryptopolitan reporting by Hristina Vasileva
