Delegate Proposal - Blockworks Research

Identity and background

What is the delegate’s identity and background?

We are Blockworks Research, an arm of the largest crypto-native media firm, Blockworks. As a company, we reach millions of people every month across our editorial site, newsletters, podcast network, and event attendees. Blockworks Research launched in May 2022, and we have spent the last ~20 months providing crypto-native and institutional investors with industry leading research, analytical insights, and governance updates. We also have a track record of delegate representation in the Arbitrum and Uniswap DAOs. Our rationale behind DAO involvement is simple: Help DAOs become more streamlined and effective in order to push our industry forward, and to set up communities of projects that we have high conviction in for success over the long-term.

Has the delegate historically contributed to the Jito Network?

We hosted Buffalu on 0xResearch back in July and again in December 2023. Outside of occasional podcast episodes with parties involved in the Jito DAO, or the occasional tweet to help increase Jito exposure, we have not yet meaningfully contributed to the Jito Network.

However, members of our team have used the protocol directly to stake SOL for jitoSOL, and subsequently used other protocols within the Solana ecosystem that also support jitoSOL in protocol operations. We are optimistic that our application to become a delegate will enable us to contribute to the Jito ecosystem in a more substantial way.

Has the delegate historically been involved in protocol governance?

As mentioned previously, we have been actively involved in governance over the past year, in particular with the Uniswap and Arbitrum DAOs.

For Uniswap, we hosted the first ever Monthly Uniswap Governance Call in December to discuss current and upcoming proposals, how governance activity and participation can be improved, and outline key success metrics for the protocol. Key proposals are presented in the call, ranging from Gauntlet’s fee switch analysis to Uniswap Foundation’s grant framework for 2024. These have been a great success with approximately 40 attendees, and we are now actively participating in Uniswap’s cross-chain deployment strategies/oversight committee.

Our longest engagement has been with Arbitrum DAO. We’ve been active in Arbitrum DAO and governance since AIP-1, where the Arbitrum Foundation had preemptively moved funds before AIP-1 went live for voting. At the time, “YES” was set to be the result of the vote, however, after we (and other community members) publicly raised concerns about it, the proposal ultimately failed. Some of our most recent governance actions have been our role in allocating STIP rewards and providing feedback in designing an ARB staking program.

In addition to being directly involved in governance, we also write research on proposals, governance and DAOs consistently, which ranges from in-depth reports on specific proposals and their impacts (for e.g. we’ve written reports on Orca’s Fee Switch Implementation, and Arbitrum Staking), to quarterly governance updates.

Is the delegate committed to helping the Jito Network and Solana succeed? Explain.

Yes. As a crypto-only research firm, our mission is to push the industry forward by disseminating factual information on the protocols being built. We strongly believe this industry will succeed. It is also important that we hold an objective view, and do not let our involvement in the Jito DAO introduce bias into our coverage. This is what we believe sets us apart from many other delegates; a commitment to unbiased analysis from analysts that pay attention to the crypto industry holistically. We are able to take lessons learned in other DAOs and ensure that Jito does not make the same mistakes, or to take things that have worked for other DAOs and further improve upon them.

Additionally, we have covered the wider Solana ecosystem extensively via long and short-form reports since launching Blockworks Research in May of 2022. Some examples of these reports include Solana’s Redemption Arc and Solana’s Increasing Fee Revenue. In addition, our team of data analysts have also created a Solana analytics dashboard for our clientele to monitor to get a better understanding of Solana’s underlying fundamentals.

Candidate Views

How should JitoSOL validator delegation balance performance (yield) versus decentralization goals?

Jito’s delegation strategy should take a data driven approach to balance performance and decentralization. With StakeNet, validator history is stored onchain and can be used to parameterize the delegation process. Factors such as uptime and commission should be considered in order to maximize JitoSOL yield. Furthermore, a significant component of the delegation strategy should rely on various concentration scores such as Country, City, Service Operator etc. We note that the Jito validator is constrained to only a subset of Solana validators that run the jito-client. The delegated set does not need to be maximally decentralized today and should focus on the overall growth of JitoSOL via focusing on performance, but there should be a laid out plan to eventually support non-institutional validators while avoiding a principal agent problem to further decentralization efforts.

With StakeNet, validator history is stored onchain and can be used to parameterize the delegation process. Blockworks Research intends to lead the community’s effort in creating a sound delegation framework that balances the tradeoff between performance and decentralization. As deposit growth continues, so does the DAO’s responsibility to the network.

What should be the priorities for JTO liquidity mining and DAO token grants?

JitoSOL market share has exceeded the long-standing market leader, Marinade (mSOL), as the most dominant LST provider on Solana. It was unsurprisingly able to do this pre-TGE, but has been able to continue its market share expansion in the absence of token incentives since the airdrop occurred in early December 2023.

34.3% and 25% of the 1B JTO token supply were allocated to community growth and ecosystem development respectively upon genesis. This is nearly $1B of value as of February 1, 2024. We believe that incentives should be used carefully, with a heavier emphasis on driving NEW initiatives forward. We also believe that incentives should be used to help bootstrap newer protocols in the Solana ecosystem in an effort to grow the entire pie. Designing incentive programs requires immense analysis, time, and community wide discussion. They tend to be most effective when designed under a narrow scope/case-by-case approach. We’ve written extensively about other protocols within the Solana LST ecosystem and are uniquely positioned to help Jito grow by helping design these programs.

The use of incentives should help bootstrap liquidity, further grow jitoSOL market share, and ultimately increase the adoption/usability of the Solana network. It is difficult to encapsulate the answer to the question in a short application, and we believe that incentive programs and DAO grants need to be discussed at length with the entire community. We believe that starting small, learning from past mistakes, providing full transparency and reiterating on designs is the best path forward, and that any incentives or grants can be paused via DAO vote at any time. This last point is important, as it ensures the DAO is in control of the treasury it was promised upon genesis.

What are your goals for the DAO as a delegate?

As a delegate, we aim to play a pivotal role in the Jito ecosystem by actively contributing to proposal creation, providing valuable feedback, conducting research, and developing essential tools. Our goal is to push the Jito DAO towards building the best product that creates value for Jito users, JTO holders, and the broader Solana ecosystem.

Our primary objective is to act as a liaison between the Jito team and the DAO, ensuring effective communication and collaboration. We plan to introduce Request for Proposal (RFP) frameworks, such as community grants programs, protocol incentives, and governance incentives, with the goal of attracting sophisticated actors to participate as Jito governance contributors. Additionally, we are committed to producing advanced research and tools that empower fellow delegates.

Solana delegation address: GiWwU2Gg6dpx7DMVCnFgDHg3xJ96WNqsVBEkH5cotJ9n