Solana staking pool Jito has seen astonishing growth, reaching over $100 million in revenue per month in November and December from priority fees and tips, according to a Dec. 26 note from Kairos Research.
This performance makes it critical to Solana’s larger success in 2024. Key metrics indicate that the total value locked in JitoSOL surged by 125% in SOL terms, with an average daily growth rate of 1.65%.
So, of the 14.3 million staked JitoSOL, about 23% is actively utilized on DeFi in things like lending markets and DEXes. Again, in the case of Jito, when introducing its restaking platform by 2025, these demands might increase manifold.
What are tips, and why they matter
While TVL growth was remarkable, the most striking development came from Jito Tips. These tips are a form of priority fees that users and applications pay to validators to prioritize their transactions when creating blocks. The compound monthly growth rate for Jito Tips reached 19.6% in SOL terms and 32.7% in USD terms.
Once implemented, the NCN via the TipRouter Node through JIP-8 and the later votes for JIP-10 and JIP-12 will be a conduit for Jito Tips to move to JitoSOL and JTO restakers. Distribution of these tips through the TipRouter will further decentralize it and offer an avenue for economic incentivization of network participants, hence securing the network via restaked assets.
The distribution of tips would look as follows: 97% to Solana validators and stakers, 2.7% to the Jito DAO Treasury, and 0.15% each for the JitoSOL and JTO restakers.
Recent estimates using 30, 60-, and 90-day moving averages show significantly large returns. For example, this would mean the DAO Treasury could make earnings of $41.7 million to $54.7 million annually, depending on market conditions.
Record high in Jito tips in Q4 2024
Compared to the previous quarter, by Q4 2024, it had reached over $2.5 million on 74% of days, with one record high of $14.7 million on the 17th of last November.
Besides, substantial volumes of MEV rewards played an additional crucial role in staked income, accounting for more than 10% of any-week rewards for 26 separate weeks in the year so far. The peak of Nov. 18th to 25th then saw MEV rewards alone create almost a full 43% total staking reward.
Market dominance for Jito also increased, with the client market share for it surging from 48% to 93% year-to-date. With such strong performance, Jito will go into 2025 as one of the cornerstones of Solana’s ecosystem.
