TipRouter: Jito's 2025 Growth Engine
Some Key Metrics for Jito when looking back on 2024, and what to watch going forward
As the year comes to a close, it’s hard to overlook the growth across Solana - and more specifically, @jito_sol’s critical role in that success. Here are some key metrics from 2024 that will be important to watch going into the new year: JitoSOL TVL up 125% in SOL terms with an average daily growth rate of 1.65% .
Of that 14.3m JitoSOL, roughly 23% of it is being productively used in DeFi through Lending markets, DEXs, etc. With the introduction of Jito’s (Re)Staking platform in 2025, along with a cohort of initial NCNs, there should be plenty of demand drivers to see JitoSOL TVL climb higher.
And while their LST growth was impressive, the most notable growth was around Jito Tips.
What are Jito Tips?
Jito Tips refer to priority fees or tips paid to validators by users or applications to prioritize their transactions in the block-building process. These tips incentivize validators to include specific transactions ahead of others in the same block. The compound monthly growth rate for Jito Tips in SOL denominated terms came out to 19.6%, and 32.7% in USD terms.
Why Do Jito Tips Matter?
With the passing of JIP-8, which adopts the TipRotuer NCN, along with the upcoming votes on JIP-10 & JIP-12 which further outline the specifics of this NCN, a portion of Tips will begin flowing to JitoSOL & JTO restakers.
What is TipRouter?
Today, Jito Tips are distributed via a permissioned mechanism. TipRouter itself introduces a decentralized way to distribute these Tips among validators and other network participants. TipRouter will take the form of an Node Consensus Network (NCN), similar to an Actively Validated Service on EigenLayer. The NCN receives its economic security through restaked JitoSOL and JTO via Jito's (Re)staking platform. In return for providing this economic security, the restaked assets (JitoSOL & JTO) receive a portion of the Tips they distribute.
Where Do the Tips Go?
Following the introduction of TipRouter through the Jito Improvement Proposals (JIPs) outlined above, Tips will be distributed in the following fashion: 97% - Solana Validators & Stakers 2.7% - the Jito DAO Treasury 0.15% to JitoSOL Restakers 0.15% to JTO Restakers
Estimates on TipRouter
The easiest way to estimate what these fees will look like is to take some moving averages of current trends. Crypto is obviously volatile, and thus so are the actions of users. So for estimating tip distribution, we can use the 30, 60, & 90 day moving averages for SOL's USD price and the Tip amount in SOL, and then annualize.
30-Day MA
DAO Treasury (2.7%) → $50,039,519
JitoSOL Restakers (0.15%) → $2,779,973
JTO Restakers (0.15%) → $2,779,973
60-Day MA
DAO Treasury (2.7%) → $54,701,658
JitoSOL Restakers (0.15%) → $3,038,980
JTO Restakers (0.15%) → $3,038,980
90-Day MA
DAO Treasury (2.7%) → $41,753,769
JitoSOL Restakers (0.15%) → $2,319,654
JTO Restakers (0.15%) → $2,319,654
Tips Visualized
For most of the year, it was rare to see a day where total Tips exceeded $2.5m in value, however this was the case 74% of all days in Q4 of 2024, reaching an all time high of $14.7m on November 17th.
Weekly MEV Rewards as % of Total Staking Rewards
Lastly, Jito was able to lift staking reward rates across the entire ecosystem thanks to their dominant client market share, which is up from 48% to 93% YTD. For their own LST, JitoSOL, MEV rewards made up 10% or more of weekly staking reward for 26 weeks out of the year, with an average of 11.79% for the entire year. The best week was Nov 18th-25th, where 43% of staking rewards came from MEV.
Overall, it was a great year for Jito - and with much of their success coming in Q4, this gives them a great deal of momentum heading into the new year.
We look forward to providing continued coverage of the most important Solana protocol going into 2025.
- Merry Christmas