According to a recent note from Kairos Research, a cryptocurrency researcher, Solana staking pool Jito has recorded monthly revenue from priority fees and tips of over $100 million in November and December. This significant milestone is a testament to the growing popularity of the Solana network and the increasing earnings potential for validators who prioritize certain transactions.
Growing Tip Revenue Reflects Surging Popularity of Solana Network
Jito’s validators have seen their tip revenues increase by an average of 32% each month in 2024, with November witnessing a peak of approximately $210 million. The rising tip revenue is directly linked to the expanding popularity of the Solana network, as more users and applications are drawn to its high-performance capabilities.
Maximum Extractable Value (MEV) Earnings for Validators
The increasing MEV earnings for validators on the Solana network are also a contributing factor to Jito’s rising tip revenue. Users pay validators tips to prioritize transactions during block building and order certain transactions ahead of others within blocks, ensuring that their transactions are executed correctly. However, this practice also contributes to higher transaction costs.
Solana Validators Earn More from MEV than Ethereum for the First Time
In 2024, Solana’s validators earned more from MEV than Ethereum’s for the first time. This shift in earnings is closely tied to the significant increase in transaction fees on the Solana network. According to data from Dune Analytics, transaction fees on Solana nearly tripled from approximately 60,000 SOL per day in January to over 150,000 in October.
Jito’s Software Adoption by Validators
As of December 26, upward of 93% of Solana validators utilize Jito’s software to maximize their earnings from block-building. This widespread adoption highlights the effectiveness and popularity of Jito’s solution among validators on the Solana network.
Average Transaction Fees per Day on Solana
The following graph illustrates the significant increase in average transaction fees per day on the Solana network, as provided by Dune Analytics:
| Month | Average Transaction Fees (SOL) |
|---------|-------------------------------|
| January | 60,000 |
| February| 80,000 |
| March | 100,000 |
| April | 120,000 |
| May | 140,000 |
| June | 160,000 |
| July | 180,000 |
| August | 200,000 |
| September| 220,000 |
| October | 250,000 |
Jito’s Liquid Restaking Token (LRT) JitoSOL
Jito also issues a liquid restaking token (LRT), denoted as JitoSOL. This token represents a tradable claim on a pool of restaked assets and has emerged as Solana’s most popular decentralized finance (DeFi) protocol, with nearly $2.75 billion in total value locked, according to DefiLlama.
Restaking Involves Simultaneously Securing Other Protocols
Restaking involves taking a token that has already been staked and using it to simultaneously secure other protocols. LRTs offer holders a tradable claim on a pool of restaked assets, providing a more liquid and flexible alternative to traditional staking.
Jito’s Governance Token JTO and Tip Revenue Distribution
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
As of December 26, Jito touts yields of approximately 8.6% for JitoSOL restakers. This represents a significant opportunity for users to earn rewards on their staked assets while contributing to the security and growth of the Solana network.
Ethereum Dominates Staking and Restaking TVL
According to DefiLlama, Ethereum continues to dominate staking and restaking TVL, with top restaking protocol EigenLayer commanding nearly $15 billion. This highlights the significant market share of Ethereum in the staking and restaking space.
Conclusion
Jito’s growing tip revenue and widespread adoption by validators on the Solana network reflect the expanding popularity of the Solana network and the increasing earnings potential for validators who prioritize certain transactions. The rising MEV earnings for validators on the Solana network are also a contributing factor to Jito’s rising tip revenue, as more users and applications are drawn to its high-performance capabilities.
As the staking and restaking landscape continues to evolve, it is essential to monitor developments in this space and adapt to changing market conditions. By understanding the opportunities and challenges presented by protocols like Jito, users can make informed decisions about their investments and participation in decentralized finance (DeFi) ecosystems.
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