JIP-31: Introduce a BAM Early Adopter Subsidy Programme
Category: Protocol
Introduction
Jito’s BAM is a significant network upgrade for Solana. By unifying block building infrastructure it will be possible to prepare the Solana network for the future of Internet Capital Markets.
BAM’s ability to improve the Solana network will be conditional on the amount of stake utilising BAM and the degree of adoption by validators running BAM software across the network. This JIP outlines a temporary BAM Early Adopter Subsidy Programme that will utilise Jito protocol fees to enhance validator revenue in the early roll out of BAM.
Motivation
The massive scale adoption of BAM across the network will reduce network jitter, unify scheduling, mitigate harmful MEV and make execution maximally deterministic on the network. This is a necessary pre-requisite for the world’s capital markets to come on-chain.
Recent Jito protocol upgrades outlined in JIP-27 and JIP-28 have created the context and the mandate from Jito DAO to accelerate BAM adoption using Jito Stake Pool delegations and the infrastructure created for directed staking. JIP-28 in particular, shapes the stake delegation profile in the stake pool progressively towards BAM running validators as BAM network stake grows.
That was a strong move towards using Jito’s economic levers to generate the outcomes it needs to accelerate BAM adoption maximally. This proposal aims to shift those levers further towards maximum BAM stake growth for a period of time. It will do this by directing 100% of protocol revenue towards a BAM Early Adoption Subsidy programme, that enhances validator revenue for those utilising BAM as specified in the BAM documentation. This programme will flow network revenue in JitoSOL to eligible BAM running validators via a distribution mechanism on an epoch-by-epoch basis based on their stake weight.
This JIP will put a temporary pause on 100% buybacks currently actioned by the CSD, which will continue to operate experimental buybacks and finalise its mechanistic approach to value accrual, readying the network for decentralized value accrual activities when the desired levels of network growth have been achieved. The previous mandate for 100% value accrual will resume as the BAM subsidy programme winds down.
Key Terms
BAM Validator / BAM-running Validator
A Solana validator operating the BAM validator client and complying with the execution requirements specified in the BAM documentation.
BAM Early Adopter Subsidy Programme
A temporary incentive programme that redirects Jito protocol revenue to eligible BAM-running validators in order to accelerate BAM adoption during its early rollout phase.
Protocol Revenue
Fees accrued by the Jito protocol and collected by the DAO.
Subsidy Pool
The total amount of Jito protocol revenue made available for distribution to eligible BAM-running validators in a given epoch, including any reflowed unclaimed rewards from prior epochs.
Effective Stake
A mechanism-adjusted version of a validator’s raw delegated stake, used to determine its share of the subsidy pool.
Claim Window
The fixed period (10 epochs) during which a validator may claim its allocated subsidy rewards for a given epoch.
Wind-down Period
The final phase of the programme during which the fraction of protocol revenue allocated to the subsidy pool decreases linearly from 100% to 0%.
Specification
This proposal will redirect fee flows to a foundation managed address that will capitalize the distribution mechanism for validator distribution.
An epoch-by-epoch claimable merkle drop of JitoSOL will be made available to participating validators who will have the option of claiming a share of network revenue determined by their active stake weight.
Validator Eligibility
Validators do not need to be active Jito stake pool members, the subsidy programme extends to all validators over a threshold stake of 50k SOL that are running the BAM client.
Validators will need to uphold the following contract outlined in the BAM docs:
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Execute all received transactions in exact order
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Provide correct execution feedback and state information.
These are implemented by default in the BAM validator client. No additional work beyond running the client is required. Modifications that breach this contract will result in removal from the subsidy programme.
Validators running BAM for at least 3 epochs will gain eligibility and will lose eligibility, if at some point a non-BAM client is used or the above contract is broken.
The Mechanism Curve
The mechanism curve is a simple piece-wise linear function that computes an effective stake, which determines a validators share of the subsidy pool. The mechanism is designed to balance the incentive to optimise for number of BAM running validators and raw stake across the BAM validator set. The subsidy is calculated linearly up to an inflection threshold (1.5m stake), after which it is shaped by a discount factor (0.5), up to an effective stake cap of (3m). Meaning that validators above 4.5m in stake will share the same effective stake.
The following equation is used to calculate effective stake, eff(s):
Figure 1: The mechanism curve shows the distribution of effective stake vs real stake. Red dots show the distribution of the current BAM validator set.
Table 1: Example calculations of effective stake at a range of stake amounts.
The Subsidy Pool
The subsidy pool is the total Jito DAO fees available to be claimed by validators at any given epoch of the programme.
A validator’s share of the subsidy pool, and therefore the rewards claimable at any given claim window, is derived from a validator’s effective stake as a proportion of total effective stake in the pool.
The size of the subsidy pool is determined by Jito protocol revenue in that epoch, plus any rolled over unclaimed rewards that have timed out over the grace period.
For example, if a validator has 2.5M stake, giving an effective stake of 2M (see, Table 1). If there is 40M of total effective stake and the subsidy pool size is 100 JitoSOL, then the validator is due to claim 5% of the subsidy pool, or 5 JitoSOL.
Claimed and Unclaimed Rewards
BAM subsidy payments will be made available to eligible validators from the distribution mechanism for a period of 10 epochs after they are initially claimable. After this period any unclaimed rewards will be re-distributed into the next epoch’s subsidy pool.
This mechanism is utilised to reflect that some validators will run BAM out of good practice, rather than direct economic incentives and/or do not wish to claim the rewards due to operational, compliance reasons, or simply abstaining from the subsidy programme.
Consequently, 10 epochs of grace is granted to validators to become aware of the programme and claim their rewards. After this time, rewards are reflowed to participating validators. There are no exemptions to this rule, the DAO is not creating any function for appeals, or deliberations regarding claiming rewards. This is an entirely mechanistic DAO function and all questions, queries and edge cases should be deliberated thoroughly before the programme is initiated.
Programme Length and Wind Down
Figure 2 : The proposed timeline of the subsidy with programmatic wind down at t-12 weeks from programme close (end Q3) assuming execution on the 12th January.
The BAM Subsidy Programme will last for three quarters of 2026 (Q1 to Q3). In the major phase of the programme (Q1-Q2), 100% of protocol revenue collected by the DAO will be distributed to the subsidy pool. In Q3, the programme will wind down from 100% to 0% on an epoch-by-epoch basis over the final ~12 weeks of the programme (beginning first week of July). The necessary conversion from weeks to Solana epochs and the exact Solana epoch of the programme commencement post vote execution will be published on the forum.
Programme Modification
The DAO has ultimate authority to change fee usage and this could be used to alter the duration, size or other elements related to this programme. Any changes would require a full JIP through the conventional governance process, including a 14-day discussion period and affirmative vote exceeding quorum requirements. Jito Foundation contributors will make reasonable efforts to alert validators if a programme modifying JIP is proposed.
Benefits and Risks
Benefits
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Utilises Jito Protocol Revenue maximally for stake growth in the early adoption phase of BAM.
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Trends the Solana network towards the optimal execution context in alignment with the Internet Capital Markets vision.
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Minimises harmful MEV and maximal extraction strategies on the network.
Risks
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Temporarily moves protocol revenue usage away from value accrual strategies into a ‘Growth’ mode for the network. Some market participants may prefer value accrual modes of protocol action.
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If it fails to drive meaningful stake adoption, it risks being an inefficient use of DAO funds. This is mitigated by the Programme Modification path outlined in the specification.
Outcomes
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100% of protocol revenue is directed towards incentivising BAM adoption across the whole Solana validator set.
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Initiation of a BAM Early Adopter Subsidy Programme for Q1 through Q3 of 2026, unless formal programme modification is triggered.
