JTO Utility And Tokenomics

[federico_reverie]

Hello everyone, it’s Federico from Reverie here.

Thank you, Andrew, for kicking off this discussion. I wanted to share some of my thoughts on these topics.

When to Distribute vs. Reinvest

One key question here is whether Jito should start distributing earnings to tokenholders now or prioritize reinvestment. In traditional finance, conventional wisdom suggests that companies should only return capital when they’ve exhausted all high-return reinvestment opportunities. As many have already noted, Jito is still a young, growing project; I suspect there are plenty of ways for Jito to reinvest capital at a high rate of return. To that end, I think it makes sense to focus primarily on reinvestment for now.

Possible High-Return Reinvestment Opportunities

1. Boost JitoSOL Liquidity & Integrations

I don’t think juicing JitoSOL staking yields by 1-2% will be a good use of funds. Instead, reinvesting towards deeper liquidity, stronger peg stability, and broader integrations across custodians, exchanges, wallets, and DeFi protocols will do far more to improve JitoSOL’s distribution and utility, ultimately creating a deeper moat around it.

2. Extend Jito Validator Client’s Functionality

Validators should be able to easily opt into running and securing NCNs without having to run multiple pieces of node software. This could be done by exposing the SVM as an API within the Jito-Sol validator client (e.g., by leveraging Anza’s SVM-API capabilities), alongside a sidecar SDK for NCNs.

3. “NCN-as-a-Service” Tooling

Rollup-as-a-Service providers like Conduit have made customizing and deploying rollups much more straightforward. Jito could build something similar for restaking, making it just as simple to spin up new NCNs and allow applications to integrate with existing NCNs.

4. Develop First-Party NCNs

I agree with @BlockworksResearch in that there are likely many opportunities to create new first-party NCNs (similar to TipRouter) that generate additional revenue for the DAO.

For example, Jito could launch a specialized NCN for proposer commitments, where validators earn payments for making extra commitments around the blocks they propose (enforced by slashing). Jito is well positioned to gather enough validator participation to make these commitments effective if they extend Jito-Sol’s functionality, given it already has >90% adoption rate among validators.

5. NCN Ecosystem Fund

Establishing an NCN Ecosystem Fund could be helpful to incentivize existing Solana infrastructure services to adopt Jito restaking, and fund external teams to research and develop new NCNs (e.g., MEV-related ones). This could be either DAO-led or run internally, depending on whether Jito Labs/Foundation have enough capital and bandwidth for it or not.

Treasury Diversification

Whether Labs and the Foundation have enough runway and capacity to execute on reinvestment initiatives, such as the above, for the next few years is an important factor to consider. If they do, they won’t need to tap into the DAO’s treasury anytime soon, so it could make sense to diversify a portion of the accrued revenue into stablecoins—enough to cover 2–3 years of operating expenses.

Discretionary Buyback

If, after covering reinvestment needs and saving for 2-3 years of operating expenses, there are excess earnings and JTO is trading well below fair value, a discretionary buyback could be a capital-efficient way to give capital back to tokenholders. Unlike recurring dividends or programmatic buybacks, which create an expectation that’s hard to scale back, discretionary buybacks offer flexibility as they can be easily paused if market conditions or reinvestment priorities change.

Conclusion

Overall, like many here, I think Jito should focus on reinvesting earnings rather than distributing them prematurely. My hope is that these suggestions spark further conversations about how and where Jito can best funnel its capital. Of course, Jito Labs and the Foundation have the deepest insight into the business, so learning more about their roadmap, priorities, runway, and internal bandwidth would help the DAO zero in on the most effective path forward.

[drnick]

Hi @cryptopeterb @marlowejohnson @David_Grid @BlockworksResearch @samandrewNIV @Ian @joebuild @cosmojiang @gauntlet @DanCrypto and others thanks so much for the super high quality discussion here so far. This is one of the highest quality discussions I’ve seen on token economics and I’m keen to see it continue as we iterate towards action.

I have attempted to capture everyone’s inputs as much as possible in a “consensus matrix”, wrapping in the various approaches and perspectives surfaced in the thread.

I have pulled out from our conversations 11 different possible approaches to ‘Jitonomics’ (thanks to the Blockworks team for that one). I think these largely fall into three categories. “Direct Value Accrual” being approaches that use the treasury to directly accrue value to the token and are simpler lower complexity and potentially utilising existing tooling. “Growth-Oriented / Reinvesting”, which are less direct but network accelerating approaches and “Mechanism Innovation”, which is approaches that are value accruing, but have some degree of innovation required in their deployment.

I’ll run through these one by one adding a bit of synthesising personal commentary and opinion in the interest of taking the discussion to the next level. I encourage you to add your own in the thread below.

1. Basic Buyback & Burn
   A simple, programmatic approach to buying JTO with a portion of protocol fees and then permanently removing those tokens from circulation. As others have noted “burning” capital is directly wasteful (on purpose). As noted in the thread, the issue with these programmatic approaches is that volatile crypto market beta can obliterate any buyback impact overnight for reasons totally exogenous to the token economy. Also, it seems there is strong consensus on the idea that if Jito diverts significant revenue into this strategy, it might forgo higher-ROI growth or liquidity initiatives. Additionally, once a burn mechanism is introduced, we create what I call the “dial effect”, that is, we have added a “dial” to the token economy, which creates a constant demand to “crank it up” even if, or perhaps especially if, market conditions become unfavourable. Challenge me on this if you disagree, but I’m reading from the conversation so far, that a simple buy back and burn is seen as a sub-optimal strategy at the moment despite its ease of implementation.

2. Valuation-Based / “Smart” Buyback
   As an extension to the above, a “smart” option exists, whereas instead of burning tokens blindly, there is stronger consensus on a smarter approach that would trigger buybacks under certain valuation criteria—for instance, if JTO’s market cap-to-revenue multiple dips below a set threshold. This idea can be expanded through nuanced strategies like PID (proportional–integral–derivative) controllers, agent-based models (I personally think this might be the end game), or specialist working groups that continually adjust buyback parameters based on real-time data. The core appeal is avoiding “buying the top” and providing more capital efficiency versus a flat buyback schedule. But the operational complexity from things like data feed sourcing, algorithmic tuning, and potential governance overhead means such a mechanism requires thorough design and testing. Nonetheless, many see this as a more promising route than fixed buy-and-burn, as it can respond dynamically to market conditions while preserving treasury funds for growth. Personally, I would like to see any committee-in-the-loop structures, for this or any of the approaches as a temporary measure.

3. Fee Switch / Staking Rewards
   Under a fee switch, some slice of the protocol’s revenue stream flows directly to JTO holders who stake or restake their tokens. The structure can be integrated with the (Re)staking architecture, offering a robust incentive for security and alignment. This model potentially cements JTO’s role as a core asset by tying protocol success (e.g., from TipRouter or other revenue lines) to real-yield for tokenholders. At the same time, people rightfully warn here that enabling this feature does divert capital from growth. Jito DAO could tailor this fee-sharing mechanism to reinforce (Re)staking or other advanced token uses, ensuring it remains an active driver of network security and expansion rather than merely a passive tokenholder payout. I would personally suggest that if this approach is implemented, it be done to advance network utility rather than a simple stake-for-the-sake-of-staking dynamic.

4. JitoSOL Yield Subsidy
   JitoSOL remains the cornerstone of Jito DAO’s ecosystem, capturing substantial Solana stake and generating meaningful revenue. LST yields are hyper competitive and I suspect that even a small boost could have a substantial impact on JitoSOL’s relative attractiveness, reinforcing its market share. Especially in the context of the currently passing JIP-16 proposal, which will add priority fees into the yield mix. Achieving this consistently however, depends on sustainability and there is the potential to boost yields in times of lower REV environments. A well‐designed yield top‐up could well be a prime goal, but should be paired with thorough modelling to confirm feasibility and ensure the DAO can handle market volatility.

5. Protocol‐Owned Liquidity (POL)
   By deploying treasury assets into JTO/SOL or JitoSOL/SOL pools (or other token pairs), the DAO can stabilize markets and deepen liquidity, while simultaneously earning trading fees. This strategy could neatly dovetail with other growth moves (like JitoSOL yield subsidies). Management overhead (especially for concentrated liquidity) is a concern, but coordinating with specialized DeFi managers or establishing a subDAO can mitigate risk (which is also a risk). Effective POL can enhance confidence in Jito’s liquidity and potentially draw more sophisticated on‐chain traders to Jito’s ecosystem. Again though, I would prefer to see a fully decentralised mechanistic system rather than a human active management strategy in the long term if deployed.

6. Auction‐Based Tip Distribution
   I like this idea a lot, it would look something like REVs being auctioned off to bidders who must pay in JTO, creating new demand for JTO if the arbitrage opportunity is profitable. It would be a real‐time value capture mechanism, ensuring that every portion of the protocol’s top revenue stream funnels back into JTO liquidity on-chain. It does add complexity and would require a novel mechanism, but there are established players in the market that play these sorts of games who would need an inventory of JTO to bid.

7. Real‐Yield Gauges
   A “Curve‐inspired” model where actual protocol fees, rather than inflationary tokens, are allocated to DeFi pools or other strategies through a governance‐based gauge. By locking JTO (possibly in a vote‐escrow system, although I think better systems might exist), participants decide which pools or integrations get a share of fee subsidies. The promise is a market‐driven approach to distributing real yield, potentially boosting liquidity and cross‐protocol activity for JitoSOL or restaking derivatives. However, implementing gauge mechanics can be technically complex, but again could add significant utility to JTO.

8. I think it’s accurate to say that the “Buyback & Barter” idea originally combined two quite divergent ideas, purchasing JTO off the market (a buyback) and then swapping it with another protocol’s DAO. A basic buyback is more about direct value accrual, whereas “DAO‐to‐DAO deals” revolve around forging alliances that might yield special integrations, cross‐liquidity, or co‐marketing. In such deals, a certain allocation of JTO (which probably makes more sense to come from treasury assets) is bartered for strategic concessions—like better yields, shared user bases, or other synergy. While the concept is innovative, it demands careful partner vetting and well‐structured terms (vesting, milestones) to prevent misalignment. Generally, the DAO has significant JTO reserves that can be utilised for economic alignment across the ecosystem, it should however be used carefully and a mechanism for brokering these bids, or pro-active approaches would be novel.

9. Grants / Ecosystem Funding
   Allocating a share of the DAO’s revenues to ecosystem projects and integrations and expansion of NCNs appears straightforward, but many DAOs have found that open‐ended grants can become a coordination trap, leading to endless proposals and minimal ROI. Hence, I think the emphasis in the Jito community should be on a pro‐active or selective model, in which the DAO (or an authorized group) actively identifies high‐impact partners or teams. This reduces administrative overhead and ensures funds are channeled to initiatives that genuinely advance JitoSOL adoption, (Re)staking usage, or other strategic goals, with grant type action being taken care of by the Foundation.

10. Stablecoin or Multi‐Chain Expansion
    Launching a Jito‐branded stablecoin or branching out to new blockchains (through acquisitions, (Re)staking expansions, or MEV solutions) could be a longer‐term avenue for growth. These moves come with significant technical, legal, and liquidity challenges and it’s likely that if these strategies were taken it would be better done by Jito Labs or the Foundation after Jito cements its presence on Solana. Additionally, stablecoin regulations are actively in flux and it seems like new moves prohibit the use of pass through yield, which I believe would mitigate a lot of the direct utility.

11. Treasury Diversification & TradFi‐Style Allocation

A modest level of treasury diversification such as converting some revenue into stablecoins or similarly low‐volatility assets can offer a runway and protect the DAO from crypto’s price swings and is desirable. However unlike many other DAOs Jito collects real REV in SOL and although would be subject to market beta, is not wholly subject to endogenous collateral, which makes diversification significantly more important. My worry with where this ends up is that we move too far away from a highly mechanised system that governs a DeFi protocol and more towards an on-chain fund, which can spiral into complexity. Again, I would like to see whatever happens on the diversification from happen in a decentralized manner such as potentially expanding the auction ideas into stablecoin as well as JTO bid moments.

Next Steps

• Review the matrix of ideas and state your preferred directions from the list. From that I hope we can reach some degree of prioritization. I don’t think we should be necessarily limited to a single approach.
• I think we should perhaps arrange a synchronous event to open up these conversations to a wider audience with contributions from advocates of the various approaches.
• We iterate this towards a proposal, which I think will require some degree of funding (and an approach to utilising it with low bureaucracy) to build out towards the mechanism innovation ideas.

[shayonsenguptamcc]

Overview

Really positive discussion here so far.

From MCC’s side, we stack rank the use of fee streams to the DAO in order of network growth > JTO value accrual > liquidity management. Capital allocation is inherently a time and context specific problem, so in our view, reviewing any decisions or parameters here at some regular cadence to account for network growth priorities, market conditions, and every other implicit variable is going to be necessary.

Here’s one framing of what this could look like:

Setup

Suppose in a given fixed time frame (assume one week), the DAO accrues y in fees and divides them according to three fractions alpha_1, alpha_2, alpha_3 where alpha_1 + alpha_2 + alpha_3 = 1

• alpha_1 * y → Yield Augmentation (jitoSOL lockups with term structure)
• alpha_2 * y → Buybacks (open-market purchases of JTO)
• alpha_3 * y → SOL Reserve Management (stake or liquidate)

Yield Augmentation

The first share, alpha_1 * y, funds incremental yield for jitoSOL stakers who commit to lockups of varying lengths. Suppose we define three lockup tiers with durations T_1 < T_2 < T_3, and target relative yield multipliers r_1 < r_2 <r_3. As an example:

• Tier 1 (T_1 = 4 months): r_1 = 1.5
• Tier 2 (T_2 = 8 months): r_2 = 2.5
• Tier 3 (T_3 = 12 months):r_3 = 3.5

If s_1, s_2, s_3 is the total jitoSOL locked up in each tier, the total incremental portion is distributed proportionally:

ExtraYield_i = (alpha_1 * y) * (r_i*s_i) / (s_1 + s_2 + s_3)

This creates a proxy yield curve reminiscent of long-term staking with relatively low engineering overhead and a simple call to action. Additional yields can also be distributed directly via TipRouter.

Buybacks

The second fraction, alpha_2 * y, can go toward open-market purchases of JTO, contingent on whether JTO’s market cap falls below a desired target of SOL’s market cap. Let p be the ratio:

p = (JTO market cap) / (SOL market cap).

We define a target p* = 5% as the lower bound of the corridor.

• If p >= p*: The DAO does not spend on buybacks. Unused funds remain in treasury or be reassigned.

• If p < p*: The DAO deploys some portion of alpha_2 * y to purchase JTO over a specified window (e.g., daily increments). A simple linear rule could be:

  Buyback = alpha_2 * y * (p* - p) / p*

So as p decreases further below 5%, the buyback portion escalates. Purchases are time-weighted. If the ratio recovers back to 5% mid-epoch, the DAO can halt remaining buys and preserve leftover capital.

Reserve Management

alpha_3 * y is directed to the DAO’s SOL reserves. The DAO can stake a fraction q of these reserves directly to jitoSOL, and potentially liquidate (1 - q) into stablecoins if operational liquidity is needed. Specifically,

q * (alpha_3 * y) (staked in jitoSOL)

(1 - q) * (alpha_3 * y) (converted to stables)

The DAO can adjust q based on market conditions, budget forecasts, other exogenous variables.

Periodic Recalibration

At each governance epoch (quarterly?), the DAO evaluates:

1. Core Parameters alpha_1, alpha_2, alpha_3: How much capital goes to yield augmentation, buybacks, and reserves.
2. Lockup Tiers: Whether to alter the durations (T_1, T_2, T_3) and yield multipliers (r_1, r_2, r_3).
3. Buyback Target: Confirm that 5% is still the correct ratio. If JTO or SOL valuations change drastically, the DAO can tweak this corridor or the linear scaling formula.
4. Staking vs. Liquidity: Determine what fraction q of alpha_3 * y remains in staked SOL and how much is converted to stablecoins.

The DAO would need to instate treasury management council, and convene at a regular basis to review these parameters.

[Sol]

Hey guys. Great to see so much discussion here on a neglected topic.

I try to keep my words simple, less technical and will split my views on different posts for easier reading.

1st, i believe in order for JTO to increase value, beyond its utility, it must also able to capture value adequately and in the right way.
2nd, in order for the 1st to happen, Jito must have not just strong revenue, but also diversified to keep it resilient in the face of competition & mkt downturn.

To elaborate on my 2nd point, Jito currently get revenue from jitosol (which TVL is growing steadily but at slow pace) and MEV (restaking’s revenue also comes from MEV currently). I don’t have details at back of hand, but i believe most revenue comes from MEV (esp during memecoin bull) rather than jitosol fees.

However, MEV revenue is extremely volatile/cyclical and dependent on memecoin speculation/demand for priority inclusion. 2nd, as @BlockworksResearch mentioned, there are increased competition hungering to eat Jito’s lunch. There is trend where apps are internalizing their MEV to keep most value to themselves, bypassing jito’s validator level auction.

Therefore, i agree with @BlockworksResearch suggestion to have more product offerings such as Jito branded stablecoin/jitobtc etc using jitosol as the collateral of choice. Ideally Jito can maintain high revenue from different verticals even when mkt is bearish (look at hyperliquid as a perfect e.g.).

I am glad to see Jito’s making fantastic hires (Rebecca Rettig, Thomas Uhm etc) to push jitosol’s institutional adoption and become the staked sol etf of choice. This would have positive feedback loop with MEV growth.

Nevertheless, I am keen to hear Jito’s team response to competition. How do they protect/grow their MEV revenue? What are their plans to diversified their revenue sources?

I will continue my views on a 2nd post below.

[Sol]

2nd Post:

Next, assuming Jito managed to now have very strong and diversified revenue, the question is, how much of the revenue “captured” should be routed to JTO holder in a clear, simple, predictable and sustainable way?

Currently, 0.15% of MEV is routed to JTO restaked holders. It’s a good start but quite frankly not going to excite any investors (let’s be honest about this). 100% of jitosol fees (4% mgt fees) goes to dao which is great. But this is != value accrue to JTO. I believe market recognize this.

I agree with comments above we should prioritize “growth” and not be “short term” in extracting value to JTO holder too fast.

But community has to know in advance at least:
What’s the plan?
How much meaningful value should be be returned?
Based on what condition or KPIs met/by certain timeline?.

I think Ethena have some clear criteria for their ENA’s fee switch. If market is crystal clear on this, I believe JTO will perform well despite no meaningful revenue “fee switch” yet.

Moving to next point, which i have concern. I agree with @samandrewNIV that “Misaligned incentives is the biggest issue plaguing Jito”.

My question is why are Jito Labs and Jito Foundation separated? They clearly have aligned objectives to create products + grow jito’s adoption. In normal circumstances, most, if not all companies do both as a single entity.

In addition, there are non-trivial 24.3% and 25% of JTO supply allocated to ecosystem growth and ecosystem development respectively. If Jito succeed in its adoption, does jito labs not stands to benefit greatly?

I believe Jito Labs is a for-profit entity. If they make $$ as a result of also leveraging resources from separate Jito foundation/jito dao entity, beyond paying for usual operational costs/strategic initiatives, where do the excess net profit allocated to Jito labs goes to? Jito labs have clearly raised $$ with JTO token sale too.

For the reasons stated above, it’s not unreasonable to expect Jito labs to be accountable to JTO holders too.

However, do Jito labs also have equity investors as well? If yes, isn’t equity investors directly fighting for share of revenue with JTO holders and thus diluting the value of JTO ? Usually equity investors also holds JTO tokens so they benefit on both sides but this would be unfair to pure JTO holders.

Only until recently, 5% of all mev fees goes to Jito labs and none to Jito dao/holders. Even for Solana labs which is a separate entity from Solana foundation, do Solana labs get % of sol base + priority fees? I think all values flows to only SOL holders. So, should not this also be the case for JTO ?

The question is should we discuss @samandrewNIV point on merging labs/protocol as 1 and all fees flows to dao, so that everyone are truly aligned ? And JTO becomes the central asset of real value at the heart of Jito and not 2nd class citizen behind equity holders and jitosol holders.

[Sol]

3rd and last post:

I seen a lot of discussion on buybacks and burns. Not a fan of this. Because this “rewards” all JTO holders with no differentiation on which holders are more active in governance (for e.g.) or taking risk with lock up on providing some utility/service VS purely just passive holders.

In time of bull mkt, less tokens can be bought because price is higher. In times of bad mkt, precious revenue may be used but to no effect especially if sell pressure is way higher than buy pressure anyway.

Personally, I prefer JTO holders to have a bit more “skin in the game” in order to be rewarded. Such as staking and getting rewarded in stablecoins (either sell sol rewards for stables or use sol rewards to create a “jito branded” stablecoin) OR perhaps a combination of rewards in stables + sol.

Imo, the concept of rewarding in stablecoins is more palatable/easier to accept logically and emotionally. In bull market, stakers at least have a choice to either keep the stables or use it to purchase something. In bear mkt, stakers can appreciate they are getting something stable in environment where everything is falling.

Staking & locked up tokens also provide token sinks which could be bullish when supply is less and also limits selling when bearish. Not everyone will stake, therefore, more rewards can flow to a smaller group of people. Yet, at same time, passive holders who don’t stake, may still benefit in increase in price because of demand of buying JTO token to access value capture.

In conclusion:

1. we need clarity on jito’s path towards strong and diversified revenue regardless of market condition & competition
2. ensuring meaningful amount of value from all revenues is accrued towards JTO and no conflict of interests that dilute JTO value
3. identify right method to return value back to JTO holders with the best trades off that market can easily understand

[drnick]

Jito DAO: Roundtable One

Below is an overview of the first Jito Roundtable held at 10am ET Tuesday 29th 2025. If you didn’t catch it you can check it out on the X feed HERE. Continuing the theme of this thread, it was an incredibly high signal chat, with @cosmojiang @BlockworksResearch @David_Grid @Ian and Nate (Token Engineering Commons). The full transcript can be found HERE.

We will continue, with two further roundtables. DM me or @andrewt if you would like to participate.

1. Why the roundtable was held

• Jito DAO captures material REV – since its launch the Jito DAO has become one of the highest fee-earning DAOs in DeFi.

• No agreed capital-allocation policy – the DAO still lacks a strategy on whether the cash flows should be returned to token-holders or re-invested to widen Jito’s moat.

• Goal of the Rountables – surface the leading forum ideas, debate them live, and start converging on a proposal that can be coded, tooled-up and put to a DAO vote in the next few weeks.

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2. Proposals & arguments at a glance

Theme	Proponent(s)	Core Mechanics	Claimed Upside	Main Concerns / Counter-points
Epoch-end SOL-for-JTO auctions (buy-back via English auction)	Ian (Kairos)	Every epoch 2 % of SOL tips are auctioned; bids must be in JTO → drives continuous market buy-pressure.	“Moment-in-time value capture”; reflexive flywheel (higher JTO → cheaper incentive spend).	Added complexity, depends on healthy JTO float & off-chain liquidity; might leak value to arbitrageurs.
Dynamic (valuation-aware) buybacks / dividends	David (Finality), Cosmo (Pantera)	Sliding scale keyed to revenue or m-cap multiples: cheap → buy back; fair → hold; rich → fee switch.	Mimics public-equity capital-allocation best-practice; avoids buying an over-priced token; simple to explain.	Needs robust oracles; still leaves the growth budget question open.
Barter / DAO-to-DAO “strategic buyback”	Orig. Nick/Andrew; discussed by Blockworks	Buy back JTO and immediately lodge it with a partner DAO in exchange for preferential treatment (e.g. liquidity routing).	Hard-wires long-term alignment between protocols.	“Just do the deal” – the buyback layer is unnecessary overhead.
Growth is a priority	Darren (Blockworks), Nate (TEC), Dan (Blockworks Data)	Funnel a majority of cash flow into new products:

• Jito-backed yield-bearing stablecoin

• Wrapped BTC on Solana

• Decentralised RPC network

• Possible MEV-client M&A|LST market still early; MEV margins may compress; winning new verticals widens moat more than redistributions do.|Must prove high ROI; DAOs historically poor at grant-style capital deployment; danger of analysis-paralysis.|
  |Keep mechanism simple, governance disciplined|Cosmo, several others|Start with a light-weight, auditable rule set; revisit every few months.|Execution risk drops; reinforces a “capital-efficiency culture”.|May leave marginal efficiency on the table compared with bespoke mechanisms.|

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3. Areas of emerging consensus

1. Growth and distribution are not mutually exclusive – treat them as separate levers; fund high-ROI growth proposals case-by-case, but establish an always-on and dynamic return-of-capital framework.

2. Simplicity > complexity – simple mechanisms, complexity (and people managed structures) add failure and centralisation risk.

3. Tooling gap – the DAO can already pass proposals for growth, but it lacks on-chain primitives for auctions, dynamic buybacks or fee streaming. Building those contracts/oracles is the actionable next step.

4. Milestone-based funding for any growth spend (including potential DAO-to-DAO deals or M&A) is preferred over open-ended grant programs.

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4. Key open questions to solve before a formal JIP

• To what degree do we need to land strategy now: revenue multiple? price-to-SOL ratio? Market-cap-to-cash-flow? Or, concentrate on moving first?

• Growth to Re-distribution balance: no hard numbers were agreed; participants leaned toward a flexible rule linked to opportunity and context.

• Which mechanisms: auctions, fee-switches, buy-backs (smart, but how?), others? More than one? Which ones?

• Governance workflow: structurally how do we get the tools built, does every parameter change require a full DAO vote? Levels of autonomy? What kind of mandate can we build?

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5. Immediate next steps

1. Proposal drafting – Andrew, Nick (and volunteers) will begin forging a proposal framework and start thinking about how we can get the DAO to truly build its own tokenomics function.

2. Forum dialogue – Let’s keep the conversation going here, it’s high quality and shaping the roundtables and the proposal. Consider it an important backchannel to the roundtables.

3. Round-table #2 – cover more mechanisms, get more expert insight, and continue the thinking. Any feedback on #1 most appreciated.

4. JIP submission – target this month to keep momentum and capitalise on current chain activity and sentiment.

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6. Take-away in one line

The DAO agrees Jito’s cash flows are an extremely high value strategic asset that need to be activated; the challenge is to forge a DAO strategy for getting the mechanisms in place that utilise valuation-aware triggers, whilst maintaining maximal decentralisation – tooling work starts immediately post vote, roundtable two, next week.

[eli5oftldr]

I would like to expand Blockworks’ thought regarding the DAO-to-DAO token buybacks.

Jito’s success depends to a great extent on the success of the entire Solana ecosystem.

If there is high activity happening onchain, Jito thrives.

It’s all about the dynamics happening within Solana’s dapps.

Shouldn’t Jito, as the major beneficiary of the Solana’s popularity try to keep that popularity up? And by “keep up”, I mean directly supporting the Solana ecosystem by being an active governance participant.

As we know, most protocols struggle with governance apathy. While most tokens are theoretically “governance tokens”, the majority doesn’t even know they have any voting rights.

Even if they knew, they probably wouldn’t care anyway, though. Most DeFi protocols’ governance proposals are quite incomprehensible to people who haven’t farmed in 2020 those xyzQWEzyz-ish tokens to put them immediately as collateral to borrow plsQWERTYzxcTYT-ish tokens, so one could farm those kjsbgsgkdfgkdsbgk-ish tokens.

Tokens are treated purely speculatively. And it possesses serious risks for protocols - problems with reaching quorums (and so passing important proposals) or opening a window for malicious treasury-extractors.

Governance is enormously important. MakerDAO (currently sky.money), AAVE, Curve, or Compound managed to stay around for that long thanks to high dedication to maintaining proper governance processes.

I was thinking; shouldn’t Jito create its own metagovernance division that would specialize in governance advisory and active governance participation across the most meaningful Solana protocols?

PS.

To make it clear; are we looking for ONE proposal to be executed, or is diversification (i.e., x% for this proposal, y% for that proposal, etc.) taken into account?

[drnick]

Yes, governance is hugely important without a doubt and Jito is a substantially important piece of the Solana ecosystem. I think it will be important for Jito DAO to be involved in Solana governance in some material way, both in SIMDs and potentially in other DAOs. I like the suggestion.

On the latter, I think a singular, but broad enough proposal to get the ball moving quickly, but us to iterate into a diverse expert driven approach is the wise move. As we’ve seen across the DAO space, these global consensus mechanisms are not great for nuanced decision making. I have some ideas on this I’ll be posting soon.

[drnick]

Jito DAO: Roundtable Two

Below is an overview of the second Jito Roundtable held at 12:30pm ET Thursday 8th May 2025. Catch the full stream on the Jito X feed HERE. Again this was another fantastic chat I recommend you catching up on. We had over two thousand viewers and I think this is proving to be an excellent format for this kind of consensus building. This time round we had @Othman @shayonsenguptamcc @andrewt @cryptopeterb @gauntlet and myself. The full transcript can be found HERE

1. Second Roundtable

• Approx $30 M/year – Currently Jito DAO is generating ≈ $30 million in annualised fees. Our roundtables continue to draw on wide expert opinion to discuss ways in which this REV can be activated for the token economy.

• Expert consensus – this follow-up gathered new stakeholders (Multicoin, Coinbase-delegate, Gauntlet, Chainflow) as we continue to press toward a concrete JIP.

• Core themes – weigh how fast to start value-accrual, how much to reinvest, and who/what should make the call (humans, or code).

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2. Proposals & arguments at a glance

Theme / “bucket”	Proponent(s)	Core Mechanics	Claimed Upside	Main Concerns / Counter-points
1. Network-growth first (stake flywheel)	Shayon (Multicoin)	Route a slice of fees to augmented-yield programs (e.g. tiered lock-ups) that pull more SOL stake into Jito products. Stake is king.	Larger stake = fatter moat; fees directly buy market-share.	JitoSOL focussed strategies potentially considered longer term bet than JTO strategies.
2. Simple, continuous buy-back & burn (“get off 0”)	Peter (DAO delegate)	Every week TWAP 1.5 % of Tip Router fees into JTO; send tokens to burn. Uses existing Solana tools.	Zero execution overhead; creates permanent bid from day-one; DAO does what only DAO can.	“Buys the top” if price rich; ignores liquidity projects; static % may age badly.
3. Dynamic buy-backs with valuation bands	Shayon	Turn buy-back on only when JTO trades below pre-set corridor vs. SOL m-cap or revenue multiple; else pause/hold.	Mimics public-equity capital allocation; avoids overpaying.	Requires oracle + human council; more code to ship; still time-based risk.
4. Liquidity-as-a-moat (protocol-owned liquidity)	Traver (Gauntlet), Othman (Chainflow)	Use part of fees (or Treasury JTO) to seed deep pools for JitoSOL, restaked-JTO, etc. Target utilisation ratios (e.g. ≥ 40 % of DeFi TVL).	Stickier LST market-share; better UX for leverage/ETF products; fees from LP position.	Adds impermanent-loss &; current JITO-SOL liquidity already “good”.
5. Dashboards & Multi-mechanism approach	Othman	Fund real-time treasury & flow analytics before committing large % splits. Find data informed priorities and activate mechanisms.	Decisions become data-driven; easier to iterate. Dynamic switching between mechanisms based on market information.	Data driven approaches are less quick.

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3. Areas of emerging consensus

1. Buckets help – A frame of cash-flow in three tiers:
   Sustainability → Growth → Distribution.

2. Action beats perfection – “get off zero” quickly, but design mechanisms that can be re-tuned every few months.

3. Some automation is realistic – basic oracles + hard bands can run buy-backs; humans are still needed for periodic re-weighting, capital strategies age with market context changes.

4. Measure or it didn’t happen – dedicate budget to public dashboards so every experiment can be scored (APR uplift, liquidity depth, burn-rate, etc.). Create a context of competing mechanisms.

5. Growth again seen has vital - cementing JitoSOL market share and liquidity should be priority, but not necessarily mutually exclusive to token value accrual.

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4. Key open questions before drafting a JIP

• Buy-back flavour – potentially to start with Peter’s weekly TWAP and layer in valuation bands later, or jump straight to dynamic corridor?

• % split across buckets – how much of the 3 % Tip Router REV goes to growth vs. burn vs. POL?

• POL target & assets – is JITO-SOL liquidity actually shallow, or is restaked-JTO the real gap? Treasury JTO vs. fresh fees?

• Treasury composition – stay 100% SOL, or diversify a fixed runway slice into stables?

• Governance structure – the path to full on-chain automation can be a target, but will require human in the loop governance for a while. A structure will need to exist to get the mechanisms built and operational.

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5. Immediate next steps

1. A public REV / treasury dashboard (Andrew + Chainflow suggested).

2. Draft a JIP allowing for:

• multiple mechanisms to be built

• allow for dynamic market context based strategies

• data informed approaches

3. Land on high level approaches to build a proposal mandate flexible rather than prescriptive.

4. Schedule round-table #3 Ideally this week, move from consensus formation to proposal.

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6. Take-away in one line

The panel agrees Jito DAO can’t sit on a $30 M/year without moving; moving quickly and iteratively is a desired approach, move towards automation but recognise expertise, and layer smarter allocation rules as data becomes available.

[natesuits]

@eli5oftldr

I was thinking; shouldn’t Jito create its own metagovernance division that would specialize in governance advisory and active governance participation across the most meaningful Solana protocols?

An interesting experiment that has yet to scale is the Index Cooperatives use of their Index tokens as a method for metagovernance. Token products like DPI (weighted holdings of $AAVE, $UNI, $MAKER, $ETHENA, $LIDO, $PENDLE, $CMP, $RPL) are largely acquired as a vehicle for passive exposure to meaningful Ethereum protocols. $INDEX holders can indirectly influence the governance of these other protocols in proportion to the amount of underlying tokens held within the Index tokens.

I can imagine the same type of product could have a more effective role in metagovernance if adopted by Jito, through the use of JTO.

You wouldn’t necessarily have to commit to creating Index tokens (although, I believe such a product would have significant demand on Solana, even if it introduces more regulatory scrutiny), but you could simply bifurcate a portion of the treasury (& diversify for what protocols are most important for Solana success) to be used for dedicated governance and allow JTO holders to influence those decisions.

Anyway, just a thought.