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What Is Jito (JTO) And How Does It Work?

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Jito (JTO)
Savl
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As a Savl user, you may have noticed we recently added JTO and JitoSOL to our ever expanding list of available crypto/DeFi assets. JTO is the ticker symbol for JITO the new liquid staking platform on the Solana blockchain.

Last December (2023), eligible Solana users were rained down upon in a liquid airdrop storm which proved very lucrative indeed. Liquid staking platform, Jito, had launched and released the JTO token airdrop for claiming.

Even the lowest tier users were given 4,941 JTO tokens, which are currently valued at $2 each — so they each received close to $10,000 (although the all-time high was $4.39 so these tokens were worth $21,690).

So, what exactly is Jito?

Jito (JTO) is a platform on the Solana blockchain that allows users to stake their SOL tokens in exchange for JitoSOL. JitoSOL is a token that represents both staking and Maximum Extractable V (MEV) rewards. JTO is the governance token of Jito, giving holders the power to participate in the protocol's decision-making process and influence its future, following the guidelines in the Jito Foundation Constitution.

In simpler terms, when users deposit their SOL tokens with Jito, they are entrusting their tokens to the stake pool. As a result, they receive a liquid stake pool token called Jito Staked SOL (JitoSOL).

JitoSOL can be used freely in DeFi protocols for lending, liquidity provision, and other purposes. The rewards obtained from these activities directly enhance the value of the token. This is comparable to how Ethereum users can delegate ETH tokens to Lido Finance to receive stETH (Lido Staked ETH), with rewards also adding to the value of the stETH token.

Currently, Jito's stake pool boasts an impressive 163 validator nodes, with an astounding 6.3 million SOL tokens staked in the pool.

What is Maxminal Extractable Value (MEV)?

Maximal extractable value (MEV) has recently gained significant attention in the blockchain and decentralized finance (DeFi) community. It refers to the maximum amount of value that a user or group of users can extract from a given DeFi protocol or smart contract. MEV plays a crucial role in determining the profitability of DeFi strategies and has prompted the development of new tools and techniques to maximize returns.

In the context of Jito, MEV also offers an extra source of earnings for stakers. This earnings comes from MEV searchers and is made possible through Jito's three-part product suite. The suite is created to boost revenue for validators and prevent unproductive network spam caused by MEV searchers. The three components of the suite are:

  • Jito-Solana validator client
  • Jito Labs Block Engine
  • Jito Relayer

JTO Airdrops

Jito (JTO) has a limited supply of 1 billion tokens, with 11.7% currently in circulation. Jito plans to distribute 100 million JTO tokens, which is 10% of the total supply, to early adopters of the protocol, validators, and MEV searchers through an airdrop.

Out of the 100 million tokens allocated to the airdrop, 90% were distributed immediately. The remaining 10% were unlocked for community growth after the token launch. Of the 90 million tokens, 80% were distributed to users, while validators received 15%, and the remaining 5% went to MEV searchers.

For JitoSOL holders, the airdrop tokens were distributed based on Jito's point system. The point system was officially announced in September 2023, but points have been accumulating since the beginning of 2023. Each JitoSOL token earns the user 1 point per day. Therefore, holding 100 JitoSOL over 100 days would result in the user earning 10,000 points. Users were divided into 10 tiers, with the lowest tier receiving 4,941 JTO and the highest tier receiving 104,391 JTO (approximately $210,000 at today's price).

Jito's airdrop was mainly directed towards smaller wallets, while whales received a significantly smaller portion of the airdrop. Overall, users praised this decision, as it resulted in a more equitable distribution to smaller players in the DeFi sector.

Are you eligible?

Airdrop claims are currently open on Jito's website and will remain open until June 7, 2025. Users can effortlessly connect their wallets via WalletConnect from their Savl Wallet to the site to verify their eligibility and collect their JTO tokens. To see if you are eligible, visit https://www.jito.network/airdrop/

Conclusion

The launch of Jito was highly anticipated, causing prices to rally to a fully diluted valuation (FDV) that rivaled Ethereum's top liquid staking protocol, Lido Finance. This significant valuation led to a repricing of Solana's ecosystem, particularly impacting fellow liquid staking protocols Marinade and Blaze, which saw a 100% increase in price after the launch.

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