- 1 Solana validators have made nearly $10 Million in tips in the last few weeks.
- 2 Jito protocol has seen exponential growth in staking and net deposits, with a TVL of $1.5 Billion.
In a Proof-of-Stake protocol, when you are assigned the leader of a given block, you have the authority to determine the contents of your assigned block. Maximal Extractable Value (MEV) is the profits derived from adding, removing, or reordering the transactions within a given block.
Source: Explorer.jito.wtf
As the activity and general interest have increased, Solana MEV has become the most discussed topic in the network. The MEV on Solana is different from other chains. The protocol incentivizes searchers to run their nodes and integrate with high-staked nodes for the most up-to-date view of the chain. That’s due to Solana’s continuous state updates and stake-weighted mechanisms, such as Turbine and stake-weighted QoS.
Recently, one of the infamous maximal extractible value (MEV) sandwich bots, known as “arsc,” has profited around $30 million from Solana users in the last two months through MEV attacks. Per the SolanaFM, the bot holds over $9.9 Million, comprising Solana and non-SOL tokens.
Solana Mev Opportunities and Transactions
There has been an exponential rise in the overall Solana MEV transactions. The block validators are the ones who benefit from these transactions. Some of the notable validators of Solana are Coinbase Cloud and Google Cloud. One of the most prominent differences between Solana and blockchains like Ethereum is the absence of a meme pool and the continuous block production without any auctions. It reduces the surface area for certain types of MEV, mainly front running.
Source: Solana Transactions By Solscan.io
Some of the major examples of Solana MEV transactions are:
NFT Minting MEV: MEV from NFT minting occurs during public minting events when participants vie for rare NFTs, causing sudden blockchain congestion. It led to notable block production halts on Solana in the past years.
Liquidations: Liquidations happen when loans become undercollateralized. Searchers repay the debt to receive collateral rewards. This process is crucial for protocol solvency and benefits the ecosystem by ensuring loan platforms remain stable.
Arbitrage: Arbitrage exploits price discrepancies of the same asset across various markets, occurring intra-chain, inter-chain, and between centralized (CEX) and decentralized exchanges (DEX). Intra-chain arbitrage guarantees atomicity, maintaining price consistency without increasing toxic order flow.
An Inside Look of Jito Protocol
Jito is a liquid staking protocol on Solana whose success can be compared with Lido on Ethereum. Users who deposit their SOL tokens with Jito effectively delegate their tokens to the stake pool. In return, they receive Jito Staked SOL (JitoSOL), a liquid stake pool token. The protocol also offers off-chain inclusion guarantees of a specific set of transactions called bundles.
Source: Jito TVL by Defillama
Jito protocol has seen a jump of more than 100% in its TVL from the start of 2024. In the past week, the protocol has given their validators a tip of 54952 SOL. The protocol has observed fees of $34.4 Million with a revenue of $1.37 Million in the last 30 days. The protocol inflows have also significantly increased to $6 million per day in the previous few weeks.
Source: Jitosol staking by Dune
The JitoSol staking has observed a significant surge and reached over 11.65 million, of which 27.3k are the Solana MEV rewards. The active stakers of the JitoSol have observed a slight decline. Meanwhile, the active staking rewards for the token have surged to 14.5k, including the deposits of the JTO, as per the data provided by Dune Analytics.
Disclaimer
This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.
