An Update From the CSD
Introduction
The passing of JIP-17 executed the formation of The Cryptoeconomics subDAO aka The CSD. Its mandate and scope is articulated in the proposal, but can be summarised as the discovery and implementation of mechanisms that ensure that the on-chain value creation of the Jito Network is connected directly to the JTO token.
The Jito Network is an economic machine that generates revenue through multiple different products, including JitoSOL, the Jito Block Engine (which now routes all of its fee flows to the DAO), TipRouter, and the forthcoming BAM. Each of these are mechanised systems that collect fees from on-chain activity and route a proportion of it to the Jito DAO treasury.
The CSD has operated for just under three months and has made substantial progress. Here is an overview of the activity so far:
The High Level
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The CSD has completed its first buy back programme totalling a $1m buy back sequence, over 10 days.
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The CSD has initiated the build of three value accrual mechanisms:
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“The Vault” - A mechanism for connecting operating instructions from the DAO to multiple-sub mechanisms initiating and controlling value flows with DAO consent.
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“The JTO Auction” - A mechanism for auctioning blocks of JitoSOL for purchase in JTO.
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“Intelligent Buybacks” - A system for enabling AI agents to accumulate JTO.
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The CSD has commissioned a range of analytics tools to monitor the efficacy of buyback actions, including execution fidelity and market impact.
Operating Principles
Multi-Mechanism Value Accrual - There are no established best practices, or approaches for connecting protocol value to token economies as yet. Therefore, our approach is to execute across multiple design paths to test the efficacy of each approach against each other. The Vault will allow the DAO to scale up and scale down value flows to mechanisms, allowing us to optimize on the winners and phase out ineffective, or sub optimal mechanisms.
Practical Cryptoeconomics - Rather than sitting on the sidelines with un-utilised capital the subDAO is both designing and building novel mechanisms, but also utilises available tools to make moves and analyse impact in an ongoing fashion.
Value Accrual First - The tokenomics roundtable series generated a range of valuable ideas and strategies, many of which The CSD will explore throughout the year. As a guiding principle, both value accrual and network growth mechanisms are targeted and both will be explored throughout the 12 month term of The CSD. To reflect the “buyback season” market context and strong signal from the roundtable discussions, the subDAO is prioritising value accrual mechanisms in the first half of the term, moving into potential growth and network expansion opportunities in the latter half.
Target Governance Minimized Systems - The vision for these mechanisms is that they converge to governance minimised systems, effectively routing value from Jito revenue flows, via the DAO treasury and out to DAO governed mechanisms. By systematically removing humans from the loop, the economics of Jito can trend towards total symmetric information and permissionless value flow, connecting JTO fully to the value captured by Jito protocols.
The CSD Target Budget
The CSD budget outlines the intended burn of funds throughout the term, indicating to governors the idealised structure of action throughout the year. Spend is front loaded for build, with an emphasis on value accrual from the outset, with “distribution” based growth mechanisms in the later phase, that will aim to leverage JTO reserves to activate rapid network expansion.
A budget for “Experts” is also front loaded, which will aim to build a network of independent researchers who will analyse the data and on-chain activity and support in the development and design of the mechanisms. The DAO has hired Exo Tech as “Core Devs”, who are actively building The Vault and the JTO Auction. An additional mid-stream budget for DAO integration, identifies the goal to have the first batch of mechanisms mid-term of the subDAOs operation.
The First Buyback Sequence
The first buyback sequence, was executed as a four phase programme designed to explore the parameter space of timing and size using a well tested DCA programme:
Phase 1
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Strategy: $100k buyback - buy hourly over 2.5 days
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Size: Averaged 7.44 JitoSOL per transaction.
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Prices: Achieved an average JTO price of $1.7164 and JitoSOL price of $223.85.
Phase 2
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Strategy: $100k buyback - buy every 2 minutes over 2.5 days
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Size: Averaging 0.24 JitoSOL per transaction.
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Prices: JTO at $1.9458 and JitoSOL at $252.40.
Phase 3
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Strategy: $400k buyback - buy every 1 minute over 2.5 days
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Size: Averaging 0.46 JitoSOL per transaction.
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Prices: JTO at $1.9927 and JitoSOL at $252.80.
Phase 4
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Strategy: $400k buyback - buy hourly over 2.5 days.
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Size: Averaging 26.52 jitoSOL per transaction.
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Prices: JTO at $1.9067 and JitoSOL at $246.38.
This buyback sequence was executed between August 22nd 2025 and 1st September 2025.
Figure 2: A JTO/USD chart displaying the Initiation times of each phase of the first buyback sequence
Initial Findings
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During the buyback period JTO out traded SOL and outperformed market beta, showing evidence of potential impact of the buyback sequence.
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Based on Mark Out analysis, purchase execution was strong, with no evidence of frontrunning or adversarial market actors.
Next Steps
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Additional TWAP style buy back sequences will be initiated by The CSD with increasing size and variable frequency. The CSD’s strategies will evolve significantly in future runs.
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Novel mechanisms are in active development, with goals of integration into the DAO mid-term of the CSD’s operation.
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The coordination of high quality independent researchers to assist the subDAO in its activities.