Jito Staked SOL

Jito Staked SOL (JitoSOL) is a liquid staking token that represents staked SOL plus staking rewards in the Jito pool. The history of JitoSOL is closely tied to the development of the Jito protocol, which was founded by Lucas Bruder, a former Tesla engineer, in 2021. Bruder envisioned a streamlined platform that would make Maximum Extractable Value (MEV) enhanced liquid staking accessible to everyday crypto users on Solana.

Jito received $10 million in funding from Solana Ventures and other investors, which helped establish the Jito Foundation, a decentralized autonomous organization (DAO) overseeing Jito Labs. The Jito Foundation aimed to democratize MEV and create a mutually beneficial system where everyone could gain from Solana ecosystem inefficiencies.

JitoSOL tokens are minted by the Jito smart contract and sent to users' wallets when they stake SOL in the Jito stake pool. The tokens provide liquidity while earning a combination of staking rewards and MEV rewards. JitoSOL holders can earn yield from validators while also accruing interest in lending protocols or yield farming, making it a unique and flexible asset.

Today, Jito is one of Solana's largest liquid staking protocols, operating on a stake pool model. It offers users JitoSOL in exchange for Solana deposited on Jito that's committed to on-chain staking. Jito is known for its generous staking APY of about 7.05% and conversion rate of 1 JitoSOL to about 1.08 SOL.

Jito Staked SOL (JITOSOL) is a token that represents a liquid stake in the Solana blockchain. Here's how it works:

To participate in Jito staking, users deposit their Solana (SOL) tokens into the Jito stake pool. In return, they receive JITOSOL tokens, which are a liquid representation of their staked SOL. This means that users can trade, sell, or use JITOSOL in DeFi applications without having to wait for the standard 5-day unlock period associated with traditional staking on Solana.

The staking rewards are not directly credited to the user's wallet. Instead, the value of JITOSOL tokens increases over time to reflect the accumulated staking rewards. This means that the price of JITOSOL will diverge from the price of SOL as time passes. Users can then sell or trade their JITOSOL tokens to realize the staking rewards.

Jito's stake pool is MEV (Maximal Extractable Value) powered, which means that validators auction off blockspace and earn additional MEV rewards. These rewards are then redistributed to the stake pool, boosting the yield for users. This results in a higher APY (Annual Percentage Yield) for stakers compared to traditional staking methods.

To unstake, users need to have JITOSOL tokens in their wallet or sell/swap them on a platform like Jupiter. The JITOSOL tokens can be used in liquidity pools on platforms like Orca or Kamino, allowing users to earn additional rewards. If a user "loses" JITOSOL, their staked SOL remains intact, but they will not be able to unstake or access the staking rewards associated with that JITOSOL.

While Jito staking offers the benefits of liquid staking and MEV rewards, it also introduces additional risks. Users are relying on a third-party protocol, which can be prone to hacks or other issues. If the Jito protocol experiences problems, users may face difficulties in accessing their staked SOL or realizing their staking rewards.

Overall, Jito staked SOL (JITOSOL) provides a flexible and potentially more rewarding way to stake SOL on the Solana blockchain, but users should be aware of the associated risks and carefully consider their participation in this type of staking.

Jito Staked SOL (JitoSOL) offers several strengths:

1. Flexibility and Liquidity: JitoSOL tokens are ERC-20 compatible, allowing users to freely trade, lend, or borrow them on various DeFi platforms, such as Serum, Raydium, Saber, and Solend, without sacrificing their staking position or rewards.

2. MEV Advantages: JitoSOL holders benefit from Maximum Extractable Value (MEV) strategies employed by MEV-enabled validators. These strategies generate additional profits through transaction reordering, arbitrage, and other methods, which are then redistributed to JitoSOL holders as extra Annual Percentage Yield (APY).

3. Non-Custodial and Secure: Jito operates on a non-custodial basis, ensuring that users retain full control over their deposited SOL and accrued rewards, even if Jito ceases operations. The protocol undergoes full audits to ensure security.

4. Decentralization and High-Quality Validators: Jito's stake pool model supports decentralization by distributing stakes among numerous validator nodes, each with specific requirements and delegation tactics. This approach promotes high-quality network operators and aligns with Solana's decentralization goals.

5. User-Friendly Interface: The Jito dashboard provides a user-friendly interface for monitoring staking performance, rewards, and statistics, making it easy for users to manage their JitoSOL tokens.

6. Boosted Rewards: JitoSOL holders can earn up to 15% more yield compared to traditional staking methods due to the additional MEV rewards.

These strengths make JitoSOL an attractive option for users seeking a comprehensive and rewarding staking experience on the Solana network.

Jito Staked SOL (JitoSOL) carries several risks, primarily related to the liquid staking mechanism and the use of smart contracts. Here are the key risks associated with JitoSOL:

1. Smart Contract Risk: JitoSOL is minted by a smart contract, which can be vulnerable to exploitation if there are any bugs or vulnerabilities. This risk is higher if users use JitoSOL in DeFi protocols, as it introduces another layer of smart contract risk.

2. Depegging Risk: There is a small risk that JitoSOL could depeg from its 1:1 value with SOL, which could result in losses for users. However, this risk is considered low, and users can easily swap back to SOL if needed.

3. Project Continuity Risk: Jito's project continuity is a risk, as the project's discontinuation could impact the value and usability of JitoSOL. However, Jito's transparent and permission-less delegation formula aims to mitigate this risk by prioritizing Solana's long-term health.

4. Validator Risks: Jito delegates SOL to a group of validators, which can be subject to slashing risks if they engage in malicious behavior. While the slashing risk is low, it is still a consideration.

5. Liquidity Risk: Users may face liquidity risks when unstaking their SOL, as there is a cooldown period of 1-2 epochs (2-5 days) before they can receive their SOL. This can be mitigated by selling JitoSOL on Jupiter to avoid withdrawal fees.

6. Management Fees: JitoSOL charges an annual management fee of 4% of total rewards, which includes staking rewards and MEV revenue. Additionally, there is a 0.1% fee on withdrawal value if users directly unstake via the website.

7. MEV Risks: Jito's use of Maximum Extractable Value (MEV) strategies to enhance returns may introduce additional risks related to the manipulation of transaction order or inclusion on the blockchain.

Overall, while JitoSOL offers a convenient and flexible way to stake SOL, users should be aware of these risks and carefully consider their investment decisions.

• Lucas Bruder: Co-founder and CEO of Jito Labs, an engineer who has worked in robotics and Tesla, and is the driving force behind the creation of Jito.
• Anatoly Yakovenko: Co-founder of Solana Labs, involved in funding and supporting Jito.
• Zano Shermani: CTO of Jito Labs, introduced Stake Net, a decentralized protocol for liquid staking on Solana.