blockworks.co
The DAO governing Jito, the Solana-based liquid staking service, will consider a proposal to spend 7.5 million of its native JTO token on liquidity mining. That’s equivalent to roughly $29 million at current prices, and it’s 3.1% of the 240 million JTO held in the DAO’s treasury.
It’s the second-ever governance proposal for Jito DAO, and follows the lucrative JTO airdrop it carried out in December. The proposal was penned by DeFi research firm Gauntlet, one of 17 Jito Foundation-supported delegates which recently parted with Aave’s DAO following disagreements between the two sides.
Read more: Why Gauntlet is leaving Aave after 4 years as ‘risk steward’
Jito runs Solana’s largest liquid staking service by total value locked (TVL), per DeFiLlama. 78% of Solana validators run its Solana validator fork, called Jito-Solana. The protocol partly distributes maximal extractible value (MEV) rewards, mostly in the form of tips paid to validators by traders hoping to get their transactions to land, to holders of its JitoSOL liquid staking token.
Notably, the MEV collected by validators via Jito has surpassed the MEV paid to Ethereum validators in recent days.
Read more: MEV collected by validators is now higher on Solana than on Ethereum
Some of Jito’s recent TVL growth came from a points system that earned on-chain users allocations in the JTO airdrop and drove funds to the protocol.
But after the points-based incentives ended, Jito spent minimally on incentive programs. Notably, Jito’s minimal incentive spend comes as Solana liquid staking competitors Marinade and Blaze make significant incentives investments, Gauntlet wrote in the proposal.
To stay competitive in a post-points world, Gauntlet recommends Jito spend some of its treasury on “a variety of liquidity mining strategies.” It does not specify precisely what those strategies would be. The funds would be managed by three members of the Jito Foundation and two members of Jito Labs.
Read more: What to know about Jito’s $165M JTO airdrop
At the time of writing, the governance proposal was yet to garner any comments from the community. Per Jito’s governance docs, the proposal has to stay open for 30 days before being submitted to the DAO’s voting platform.
In a message to Blockworks, Jito Foundation delegate Ian Unsworth expressed his support for the proposal and said it was “awesome to see some intentional thinking around liquidity incentives.”