Solana staking pool Jito generated more than $100 million per month in preferential fees and tips in November and December, according to a December 26 report from cryptocurrency researcher Kairos Research.
Kairos said that in 2024, Jito’s validators increased their tip revenue by an average of 32% per month. Monthly income peaked in November at about $210 million.
Jito’s growing tip revenue reflects the soaring popularity of the Solana network. It also marks an increase in a validator’s income by prioritizing certain transactions over others. This is a practice known as maximum extractable value (MEV).
source: Kairos Studies
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MEV Bounty
Users pay tips to validators to prioritize transactions during block construction and order certain transactions ahead of others within the block. This helps users ensure that their transactions are executed properly, but it also increases transaction costs.
In 2024, Solana validators earned more on MEV than Ethereum for the first time. This coincides with a nearly three-fold increase in transaction fees on the Solana network, from approximately 60,000 Solana (SOL) per day in January to over 150,000 in October, according to data from Dune Analytics.
As of December 26, more than 93% of Solana validators use Jito’s software to maximize their profits from building blocks, according to Jito Labs, the developer of Jito.
source: sand analysis
SOL Restaking
Jito, which also issues JitoSOL, a liquid re-staking token (LRT), has emerged as Solana’s most popular decentralized finance (DeFi) protocol, with a total value of nearly $2.75 billion, according to DefiLlama.
Re-staking involves taking tokens that have already been staked (posted as collateral with validators in return for rewards) and using them to secure another protocol at the same time. LRT represents tradable ownership of a pool of re-staked assets.
Last October, holders of JTO, Jito’s governance token, voted to distribute a portion of their tipping profits to JitoSOL reinvestors. According to Kairos, Jito plans to pass on 0.15% of tip revenue to JitoSOL reinvestors. Validators will continue to account for the overwhelming majority of tip revenue.
As of December 26, Jito boasts a return of approximately 8.6% for JitoSOL reinvestors. Ethereum continues to dominate TVL staking and re-staking, with the leading re-staking protocol, EigenLayer, reaching nearly $15 billion, according to DefiLlama.
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