The crypto market has experienced a series of volatility recently, and these dramatic dips and rallies provide excellent opportunities to validate the resilience and potential of tokens. Among the recent market corrections in the crypto market, the JTO token in the Solana ecosystem has particularly attracted attention. It has shown extraordinary resilience. Not only has its correction been limited when the market falls, but its gains have been even more impressive and its performance has been very strong whenever the market has rebounded. So, why is JTO so strong? Next, we’ll dive into the reasons behind this.
1. Introduction to Jito Network project
Jito Network was launched by the Jito Labs team, a team that was deeply involved in Solana MEV infrastructure in the early days.
First of all, Jito Network is a staking agreement. By staking through Jito Network, you can obtain staking income based on Solana's ecological foundation. Secondly, Jito cannot be understood as a traditional staking protocol. Compared with other staking protocols, Jito is unique in that staking users can also obtain MEV income. Therefore, users can obtain double benefits by staking on the Jito platform. Jito is also the first liquidity staking agreement on Solana that combines MEV returns and staking returns. This is the main reason why Jito can provide higher returns.
What is MEV revenue?
MEV (Maximal Extractable Value) is the maximum extractable value, which refers to the maximum value that a validator can extract in block production that exceeds standard block rewards and gas fees by adding, deleting, and changing the order of transactions in the block.
As a Solana MEV infrastructure provider, Jito's goal is not only to extract MEV, but also to efficiently distribute value to stakers. Jito achieves the redistribution of value. In order to extract MEV revenue from the Solana ecosystem, Jito Network has built a series of infrastructure, such as: client Jito Solana, Jito Bundles that allow searchers to send transaction packages to validators, block builder Jito Block Engine, and MEV distribution system.
As the basic provider of Solana MEV, the more Solana ecological transaction volume, the more MEV revenue Jito Network can capture, and the more revenue will eventually be distributed to pledgers, so Jito TVL is growing rapidly and has now grown It is the protocol with the highest TVL in the Solana ecosystem.
2. Jito project financing
According to rootdata platform data, Jito has received a total of two rounds of financing, receiving US$2.1 million in seed round financing in December 2021, and US$10 million in Series A financing in August 2022.
Among them, the Series A financing was led by Multicoin Capital and Framework Ventures, and other investors included Alameda Research, Solana Ventures, etc. In addition, Solana Labs co-founder Anatoly Yakovenko, Coral founder and former Alameda Research engineer Armani Ferrante, and Solana Foundation communications director Austin Federa also participated in the investment in Jito Network.
3. Jito development status
Currently, the number of SOL pledged by Jito Network has exceeded 1 million, and based on the current market price of SOL tokens, TVL has exceeded US$1.5 billion.
Jito TVL has surpassed Marinade TVL and has become the No. 1 DeFi protocol in terms of TVL in the Solana ecosystem. The recent rise in the token JTO is also related to the growth of TVL.
Moreover, it can be seen from the Dune platform data that the MEV Rewards data obtained by Jito every week is also growing.
As the MEV infrastructure provider of the Solana ecosystem, Jito Network has also cooperated with some high-quality project parties in the Solana ecosystem. For example, Jupiter, the largest DEX platform in the Solana ecosystem, recently launched a tipping function based on Jito Bundles on its Swap platform to help users minimize the losses caused by MEV attacks. When users conduct Swap transactions, as long as this function is turned on, they can avoid losses caused by MEV attacks. In the future, more Swap platforms will support this function.
In addition, according to people familiar with the matter, Jito is currently building a SOL re-pledge service. As we all know, Restaking is a track that will only start to become popular in 2024, and Restaking is constantly eroding the TVL of Staking projects. For example, in the Ethereum ecosystem, the TVL of re-staking track projects such as Ethfi and Renzo is constantly growing. With this At the same time, the TVL of established Staking projects such as Lido is constantly declining. This is mainly because re-staking projects not only solve the liquidity problem of pledged tokens, but more importantly, can provide higher returns (staking users can obtain multiple returns).
The entry of capital such as Binance Labs and a16z (for example, Binance Labs invested in Renzo, Puffer, etc., and Binance Lanuchpool launched Ethfi), as well as the airdrop expectations of re-staking projects, etc., finally detonated the re-staking track.
Currently, the re-pledge narrative has begun to expand from the Ethereum ecosystem to public chain ecosystems such as Solana. According to a survey by CoinDesk, more than six teams are quietly building Solana re-pledge services. Although Jito Labs CEO Lucas Bruder refused to comment on whether Jito will launch a re-staking function in the future, it is not surprising that Jito, as the DeFi staking protocol with the highest TVL in the Solana ecosystem, will deploy Solana re-staking, and in the Solana ecosystem, Jito will launch a re-staking function. Of course, staking has a first-mover advantage.
To sum up: the strong rise of JTO token is no accident. Behind it is a profound technical foundation, strong team support and continuously innovative products and services. As the market continues to mature and develop, JTO will continue to demonstrate its unique value and potential in the future encryption market.