In a recent note published on December 26th, Kairos Research, a cryptocurrency researcher, highlighted the remarkable performance of Solana staking pool Jito in terms of revenue generated from priority fees and tips. According to the report, Jito clocked an impressive monthly income of over $100 million from these sources in November and December.
Validator Earnings Skyrocket with Growing Tip Revenues
In 2024, Jito’s validators successfully scaled tip revenues by an average of 32% each month, as noted by Kairos. This growth was most pronounced in November, when monthly income peaked at approximately $210 million. The significant increase in tip revenue is a reflection of the Solana network’s growing popularity.
Maximum Extractable Value (MEV) and Its Impact on Validators
The rising earnings of Jito’s validators from prioritizing certain transactions over others can be attributed to the practice known as Maximum Extractable Value (MEV). This concept involves users paying validators tips to prioritize transactions during block building and order them ahead of others within blocks. While this practice helps ensure transaction execution, it also contributes to higher transaction costs.
Solana Validators Earning More from MEV than Ethereum’s for the First Time
In a notable development, Solana validators earned more from MEV in 2024 than their Ethereum counterparts for the first time. This milestone coincided with a significant increase in transaction fees on the Solana network. According to data from Dune Analytics, daily transaction fees on Solana nearly tripled from approximately 60,000 SOL per day in January to over 150,000 SOL in October.
Jito’s Dominance in Solana’s DeFi Landscape
As of December 26th, upward of 93% of Solana validators utilize Jito’s software to maximize earnings from block-building. This dominance is a testament to the protocol’s effectiveness and efficiency. Developer Jito Labs has emerged as a prominent player in Solana’s decentralized finance (DeFi) ecosystem.
Liquid Restaking Token (LRT) JitoSOL: A Tradable Claim on a Pool of Restaked Assets
Jito, which also issues liquid restaking token (LRT) JitoSOL, has become the most popular DeFi protocol on Solana, with nearly $2.75 billion in total value locked, according to DefiLlama. Liquid restaking involves using a token that has already been staked as collateral with a validator to simultaneously secure other protocols. LRTs represent a tradable claim on a pool of restaked assets.
Distribution of Tip Revenue and Yields for JitoSOL Restakers
In October, holders of Jito’s governance token, JTO, voted to distribute a portion of tip revenue to JitoSOL restakers. According to Kairos, Jito plans to route 0.15% of tip revenue to JitoSOL restakers. Validators will continue to pocket an overwhelming majority of income from tips.
Yields for JitoSOL Restakers: A Lucrative Opportunity
As of December 26th, Jito boasts yields of approximately 8.6% for JitoSOL restakers. This offers a lucrative opportunity for users looking to maximize their returns on the Solana network.
Ethereum’s Dominance in Staking and Restaking TVL
While Ethereum continues to dominate staking and restaking TVL, with top restaking protocol EigenLayer commanding nearly $15 billion, according to DefiLlama. Jito remains a prominent player in Solana’s DeFi ecosystem.
The Importance of Trust in Crypto Exchanges
In conclusion, the remarkable performance of Jito in terms of revenue growth from priority fees and tips is a testament to its effectiveness as a staking pool on the Solana network. As the popularity of the Solana network continues to grow, so too will the opportunities for validators to earn significant revenues through MEV.
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