JitoSOL recently achieved a significant milestone: It surpassed the Solana mainnet in fee revenue, solidifying its role as a leading validator and provider of block services and SOL staking.
JitoSOL has cemented its position as a top validator and emerged as the leading liquid staking pool for Solana (SOL). The platform’s multiple functions, including tip-based block building, have made it a crucial source of priority fees.
Aggressive fee growth
In recent days, JitoSOL has experienced a remarkable fee increase, primarily driven by liquid staking. At its peak, JitoSOL accounted for up to 60% of Solana’s total fees. This rapid growth has transformed JitoSOL into a high-fee application, surpassing Bitcoin and Ethereum in daily fees at one point.
Although this might be a temporary event, it highlights a growing trend within Solana’s staking and re-staking projects. Experts, however, caution that the high fees might not directly benefit Jito but the SOL holders. The value of the JTO token does not seem to reflect the fee growth, leading some to recommend holding SOL as a more reliable and liquid asset.
Increased activity on Solana
Solana is currently experiencing a surge in activity, mainly due to decentralized exchange (DEX) trading. The need for reliable transactions has increased priority fees for validators and tips to ensure transactions are included in blocks. Solana has even outpaced Ethereum regarding MEV tips and priority fees.
Over the past month, Solana’s fees have risen by more than 53%, driven by increased trading of meme tokens and DEX activity. In the past week, JitoSOL received $13.4 million in fees, while Solana’s total fees amounted to $13.8 million. Ethereum’s fees were lower at $16 million, impacted by recent network updates and the use of Layer 2 solutions. LidoDAO, Ethereum’s top staking protocol, generated $20 million in fees, placing JitoSOL within proximity.
Future prospects with liquid re-staking
JitoSOL’s peak activity is also linked to its recent announcement of offering liquid re-staking, modeled after Eigen Layer. This new feature is expected to increase fees further. The development of re-staking protocols will position JitoSOL as a hub for new token creation. All new services needed to utilize JitoSOL to build and launch their tokens incur a small fee.
The impact of re-staking remains to be determined, depending on the performance of AVS projects and their applications in DeFi and other sectors. For end-users, this could mean passive income while retaining the ability to un-stake the underlying SOL or JTO tokens. However, re-staking is still considered a relatively risky market with unpredictable outcomes, even for Ethereum. The initial effect will likely make SOL more scarce.
Currently, JitoSOL has opened a query form and does not have an official procedure for onboarding partners. Interest levels will determine the launch of re-staking following months of speculation. Based on available open-source code, there are already candidates like Fragmetric planning to launch some of the first liquid re-staking tokens (LRT).
This development marks a significant step for JitoSOL and Solana, indicating a shift in the cryptocurrency ecosystem’s staking and fee generation dynamics. As the market evolves, it will be crucial to observe how JitoSOL’s strategies and innovations shape the future of Solana’s staking landscape.