As a leader in MEV-based liquid staking on Solana, JitoSOL has attracted considerable attention and engagement since launching one year ago. Over the past year, JitoSOL TVL has grown to 4.2M SOL, increasing 80% in SOL terms in just the last month. This recent growth has positioned Jito as the second-largest protocol on Solana by TVL.
Today, more than 30% of JitoSOL's circulating supply is deployed across several leading platforms on Solana, giving it a central role in shaping the future of Solana DeFi. While the integration of LSTs in DeFi is a trend seen across all liquid staking tokens on Solana, design flaws in Solana LSTs could jeopardize the entire DeFi landscape.
Despite the potential of liquid staking, all Solana LSTs fall short of true decentralization. The primary issue stems from each stake pool’s reliance on a centralized keypair and server for management operations, which compromises the core principle of true DeFi.
This not only goes against the ethos of DeFi but also brings a slew of risks. Between potential censorship, hacks and shutdowns, the current systems aren’t built with large LST adoption in mind. A notable example is the decision to sunset Lido's stSOL at a time when it was the second largest LST and an important player in Solana DeFi. There are indeed very real consequences of centralized points of failure within liquid staking protocols.
At Jito, these issues were recognized several months ago, and we saw an opportunity to pioneer a transformative solution: Jito StakeNet.
StakeNet is a self-sustaining, transparent, and decentralized protocol for operating intelligent stake pools. With StakeNet, JitoSOL becomes a timeless protocol that can forever play a key role in Solana DeFi.
At its core, StakeNet is a network of keepers and on-chain programs. Its two primary components are:
Validator History Program: This program can store three years of history for every validator on the network. This data currently includes vote credits, commission, MEV commission, validator version, client type, and can be expanded in the future. By providing a transparent and cryptographically verified record of past actions, it becomes possible both for users and on-chain programs to make informed decisions about validator behavior.
Steward Program: Leveraging the on-chain validator history, the steward computes scores and stake delegation amounts for each validator. A set of keepers coordinate running a state machine to ensure stake is delegated to the best performing validators. This autonomous system can run forever and enables a more transparent and efficient mechanism for delegating stakes based on validated historical data.
With StakeNet, it is possible for protocols to fully decentralize stake pool operations so they can live forever. Protocols can leverage on-chain governance to transparently modify parameters and state machine behavior instead of relying on centralized operators for management.
We believe StakeNet is the future of liquid staking. We’re excited for JitoSOL’s transition to StakeNet and look forward to the community exploring the design space around StakeNet. StakeNet’s intelligent design, backed by an open-sourced protocol, guarantees a competitive Solana staking yield through MEV-powered rewards, while maintaining the protocol's everlasting autonomy.
Liquid Staking undoubtedly plays a key role in the future of Solana DeFi. With StakeNet, this future is more transparent, secure, autonomous, and decentralized. We will be open sourcing StakeNet soon.
Below is a talk on StakeNet, presented by Lucas and Zano, two of Jito’s contributors, on the Breakpoint Main Stage in Amsterdam on Tuesday, October 31st, 2023: