Jito Network recently announced the launch of its governance token JTO, with plans to airdrop a portion of the supply to passing users. This initiative aims to thank those users who have contributed to the development of Jito Network, while also hoping to promote community participation and governance through JTO tokens. This article will delve into the issuance background, uses and impact of JTO tokens on Jito Network.
Issuance and distribution of JTO tokens
The total supply of JTO tokens is 1 billion, 10% of which will be airdropped to eligible users. These users include JitoSOL holders, users using JitoSOL on various DeFi protocols, Solana validators running the Jito-Solana MEV client, and searchers using Jito’s MEV products. The snapshot was taken on November 25th, which means that eligible users before this date will have a chance to receive the airdrop.
Background on Jito Network: Jito Network is currently the second largest protocol on Solana by TVL (total value locked). As an infrastructure protocol, the main goal of Jito Network is to minimize the negative impact of MEV (Maximum Extractable Value). MEV refers to the additional value that validators can obtain by reordering, inserting, or deleting transactions during the blockchain transaction ordering process. This behavior may cause losses to ordinary users, so reducing the negative impact of MEV is crucial to the healthy development of the blockchain ecosystem.
Jito Network also launched a SOL liquid staking token called JitoSOL. This token allows users to stake SOL while still participating in various DeFi protocols, thereby increasing asset utilization.
Purpose of JTO Token
JTO tokens will allow holders to participate in key decisions of the protocol, including setting JitoSOL staking pool fees, updating delegation strategies, and managing the protocol treasury. This means that JTO token holders will play an important role in the development and operation of the protocol, thereby promoting community participation and governance.
Participate in protocol decision-making: JTO token holders can participate in decision-making in the following aspects:
JitoSOL pledge pool fee setting: Holders can vote to determine the fee structure of the JitoSOL pledge pool, thereby affecting users' pledge costs and benefits.
Delegation strategy update: Holders can participate in deciding JitoSOL’s delegation strategy to ensure the best allocation of pledged assets.
Protocol vault management: Holders can participate in managing the asset allocation and usage strategies of the protocol vault to ensure the financial health of the protocol.
Jito DAO’s Liquidity Mining Proposal
Jito DAO Proposal 2, co-authored by crypto risk management firm Gauntlet and the Jito Foundation, reveals that the DAO will consider a proposal to use 7.5 million native JTO tokens (approximately $29 million) for liquidity mining. These budgets represent 3.1% of the 240 million JTO held in the DAO JTO vault and 0.75% of the total JTO supply. The Foundation will return all unused tokens at the end of the year.
The significance of liquidity mining: Liquidity mining is an incentive mechanism designed to attract more users to participate in the liquidity provision of the protocol. By distributing JTO tokens as rewards, Jito Network can attract more funds into its ecosystem, thereby increasing the liquidity and stability of the protocol.
Specific content of the proposal: The proposal details the specific implementation plan for liquidity mining, including:
Reward distribution: 7.5 million JTO tokens will be distributed to users participating in liquidity mining.
Return mechanism: Unused tokens will be returned to the foundation at the end of the year to ensure optimal utilization of resources.
in conclusion
The launch of the JTO token marks a major step forward in governance and community engagement for Jito Network. Through airdrops and liquidity mining programs, Jito Network not only thanks past users, but also attracts more new users to participate in its ecosystem. As the JTO token continues to grow in importance in protocol decisions, Jito Network will further strengthen its position in the Solana ecosystem and promote the healthy development of blockchain technology.