Solana's largest third-party client, Jito, will issue governance token JTO.

Solana staking liquidity and MEV capture protocol Jito announced yesterday the issuance of token JTO, which will be used to incentivize the community and ecosystem development, with 10% of the allocation reserved for an upcoming airdrop. This article is not investment advice.

What is Jito

Jito is a project established in 2022 that aims to provide users with liquidity services by staking SOL through the creation of the third-party client Jito-Solana. It also offers stakers JitoSOL for other fund operation strategies, similar to Ethereum's Lido protocol.

However, Jito goes beyond that by rewarding users with MEV incentives in addition to staking rewards. With the successful creation of the first MEV capture mechanism on Solana by Jito's client, similar to Flashbots' public MEV marketplace, users can earn a portion of the MEV rewards by staking SOL, benefiting both nodes and users.

As a result, Jito enables users to earn higher overall returns compared to other competitors, attracting users and nodes to join the ecosystem continuously this year. Currently, there are over 6.8 million SOL staked on Jito's client, representing 41% of the staked nodes on the Solana network.

Due to the marketization of MEV, a significant reduction in Solana's invalid junk trading information has been achieved. MEV searchers, who used to engage in frantic trading tactics to get ahead, have made the network more efficient.

With Jito's growing influence in the Solana ecosystem, the team believes it is time to formally hand over the network's governance to the community and contributors by issuing the governance token JTO and establishing a DAO and foundation entity.

Jito Introduces Governance Token JTO

Amid the recent attention on the Solana ecosystem, including projects like Jupiter, many popular projects have taken the opportunity to issue tokens for successful fundraising and more effective marketing strategies, with Jito being one of them.

According to the official announcement, Jito will issue the governance token JTO to gradually transition the protocol to a state of decentralized governance development.

JTO Distribution Mechanism

The total supply of JTO is 1 billion tokens, to be issued on the Solana mainnet. However, the contract address has not been disclosed, and the initial distribution is as follows:

• Community Growth 34.3%: Including an immediate 10% airdrop portion, the rest will be determined for further planning based on community voting.
• Ecosystem Development 25%: Providing funds to core contributors of the community, primarily aimed at developers, donated to the Jito foundation.
• Development Team 24.5%: Allocated to the Jito team with a three-year unlocking period.
• Investors 16.2%: Early investors with a three-year unlocking period.

The airdrop includes past users of JitoSOL, Solana validators running the Jito-Solana MEV client, and MEV searchers using the Jito Network. The snapshot time for points was on 11/25/2023, and the point program has ended and will no longer be updated. Detailed airdrop dates will be announced.

The token unlocking dates for the team and investors will start in 2025, leading to an expected overall token circulation as shown in the following diagram:

Jito Foundation

Jito will establish a foundation with the aim of enhancing the staking economy through JitoSOL and related products, improving the Solana network, and assisting JTO token holders in seamlessly transitioning decision-making from on-chain DAO to off-chain infrastructure and legal entities.

The foundation's allocation of token usage is crucial. The Jito Foundation will receive 59.3% of the total supply of JTO tokens, with 10% used for airdrops, 24.3% directly controlled through Realms by token holders, and the remaining 25% donated to the foundation to support ecosystem development work.

Value of JTO Token

As the governance token, JTO's value comes from the decision-making value of the protocol, mainly serving three purposes:

• Governing the fees of the JitoSOL staking pool.
• Governing the control of StakeNet parameter updates.
• Governing decisions on the DAO treasury.

Solana Ecosystem Maturing Gradually

In addition to addressing Solana's difficulty in establishing MEV, Jito has also resolved the issue of crashes caused by junk trade information. Since February this year, Solana has had no significant crash records, leading to enthusiastic participation and discussion in the market, making the token issuance imperative.

Aside from Jito, Solana has other third-party clients in development, such as Firedancer and Sig, each with its own unique features. Jito's success has driven the development and expectations of the Solana ecosystem, with third-party clients symbolizing the ecosystem's gradual maturity. It is expected that the Solana ecosystem will experience further vibrant growth in the near future as a result.

This article is not investment advice.