JitoSol's $2.5 Billion TVL Drives Solana's DeFi Growth

Solana has emerged as a leader in blockchain infrastructure, attracting attention for both its speed and the breadth of its decentralized financial applications. As competition in the staking and MEV landscape intensifies, new solutions are charting the future of the validator economy.

Brian Smith, Executive Director of Jito Foundation, discussed Jito’s strategy, its place at the heart of Solana’s MEV infrastructure, and the pivotal choices underpinning its continued growth. Smith oversees Jito’s products and governance, including its innovative liquid staking solution JitoSol, restaking initiatives, and MEV tooling. He shared his views on decentralization, building trust, responsible MEV participation, and fostering institutional adoption to drive Solana’s DeFi ecosystem forward.

Jito’s role in the Solana validator economy and MEV innovation is pivotal. Jito is considered the core infrastructure for the economic engine of Solana. Its original MEV product was novel for Solana at the time, and it has since expanded to include the leading stake pool, JitoSol, which distributes staking rewards as well as MEV rewards to stakers. Additionally, restaking is a third layer on top, ensuring that economic value flows across Solana in the most decentralized way possible. The MEV product has distributed over $1 billion in value to stakers and validators, helping to secure the network and providing a new revenue stream.

JitoSol, the largest liquid staking token (LST) on Solana, has 17.5 million Sol, which is a little over $2.5 billion of total value locked (TVL). It has best-in-class DeFi penetration and the deepest liquidity, which is critical given that liquidity is one of the main benefits of LSTs. JitoSol is managed by a DAO in a trustless way, providing much more resiliency, which is a priority for institutional clients. JitoSol is expected to continue growing as the number one asset in all of Solana DeFi, with new liquidity pairs established on AMMs being paired with JITO SOL instead of SOL due to its yield-bearing aspect.

Restaking is a powerful primitive that goes beyond just helping with the Ethereum scaling roadmap. On Solana, it is versatile and can power new DeFi protocols, decentralized physical infrastructure, and help them go to market faster and launch better products. It also improves the resilience of other DeFi protocols on Solana and provides utility to their native tokens via the restaking infrastructure. This makes developers’ lives much easier by using existing infrastructure rather than recreating it from scratch.

TipRouter was introduced to decentralize Jito’s MEV infrastructure, which had over a billion dollars in value distributed. It evolved into a primitive used around priority fees, a different form of execution fees on Solana, where those can be distributed to stakers. This flexibility is helping usher in a new era of how stakers and validators can receive their rewards for doing good work on Solana.

Jito has always taken an extremely long-term view, operating solely on Solana since 2021. The company believes that its success is tied to Solana’s success and that Jito should always do what is best for Solana while providing the most value within that framework. There is a symbiotic relationship between providing new mechanisms and giving the most possible rewards to Solana while continuing to fund the infrastructure required for this.

JITO is the governance token of the JITO network, controlling core infrastructure across liquid staking and MEV on Solana. There is significant participation from institutional players, including Coinbase and Blockworks, and the level of discourse is quite significant. The next step is to grow the level of participation from all parties earning rewards from JITO and are critically impacted by that, finding the best balance between what is the right solution for JITO, what is the right solution for Solana, and how to move forward on key strategic questions.

There is a steady trend towards more liquid staking over native staking, which remains less than 10% of the total stake on Solana. As the market continues to see the utility of liquid staking, it is expected to go up. The question is how to see additional yield on that, whether people should be using DeFi or restaking. To date, the majority of assets are still used in DeFi because it is a more known primitive on Solana. There are very good opportunities in providing liquidity with relatively safe yields on that, and the lending market continues to grow on Solana. Restaking offers incremental opportunities for restakers on JitoSol and other LSTs, but the restaking ecosystem needs to mature and continue growing to support additional capital.

JITO DAO is one of the most engaged and thoughtful DAOs in all of Solana. Since the token launched about a year and a half ago, it has evolved significantly. There are increasingly meaningful opportunities and key decisions, including a major discussion around tokenomics for the JTO token, including how fees should be attributed. Smart investors, including Multicoin Capital, North Island Ventures, and Pantera Capital, are weighing in on the distribution of fees, making JTO governance very exciting for 2025.

JTO restaking prioritizes sustainable yield, which comes from fee generation rather than token emissions. This focus on sustainable yield is expected to continue, along with powering different consumer DeFi apps. Jito Labs’ decision to deprecate the mempool, a product that wasn’t native to Solana but was part of Jito’s initial MEV stack, was controversial. The end product led to a lot of front-running of user trades on Solana, and Jito Labs elected to terminate its hosted mempool. This decision had a negative impact on Jito Labs’ revenue, as well as the revenue attributed to everyone on the MEV stack, but it was ultimately the right decision to prioritize the long-term health of Solana over short-term metrics and potential controversy in the market.

Solana has been number one in economic value generated of real fees for any crypto network over the last six months. It is exciting to see that it is now larger than many of the EVM competitors that were unforeseen when Smith first joined Solana. The momentum in the ecosystem is overwhelming, and Smith is excited for how Solana is headed and what that means for users of the network.