Jito and Adobe stock modified by Blockworks
Today, enjoy the Lightspeed newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox. Subscribe to the Lightspeed newsletter.
Howdy!
Happy Friday afternoon to the cheeky pint guy, who I think about at least once every Friday.
“Don’t go home until you’re proud… a-bosh!”
But before then, what should we make of this Jito restaking news?
Jito is building restaking, and markets like it
For some time, it was something of an open secret that the major Solana protocol Jito was working on a restaking platform that would bring something akin to Ethereum’s EigenLayer to Solana.
The liquid staking and maximal extractible value (MEV) specialist finally confirmed the rumors yesterday when Jito released the code for Jito restaking. Markets seemed to like the move, with JTO climbing 8% and SOL up 9% over the past 24 hours, according to CoinGecko.
Restaking is the term coined by EigenLayer for taking assets staked to secure blockchains and staking them a second time to secure additional apps and services. For instance, if you staked ETH and received Lido’s stETH, you could take that liquid staking token and deposit it on EigenLayer, where it could be used to secure “actively validated services” (AVSs) such as EigenDA, an in-house developed piece of crypto infrastructure.
This makes stETH more useful, and it extends the use of Ethereum’s security, at least in theory. This could all be done on Solana, too.
But I bet markets are also partly excited about the liquidity that could be coming. EigenLayer has been extraordinarily successful at drawing deposits, even if its ability to generate meaningful yield is something of an open question. EigenLayer is already the second-largest crypto protocol in total value locked (TVL), with over $15 billion in assets held on the platform, according to DeFiLlama.
Much of this investment came in the leadup to EigenLayer’s training wheels launch as investors put their money on platforms thought to soon be airdropping tokens, including EigenLayer. It will be interesting to watch if Jito can also draw this sort of major liquidity — especially as Solana passes Ethereum in some DeFi metrics.
Still, at least one person on X who read through the code was excited about Jito’s product letting AVSs cap their deposits. One critique of EigenLayer is that while it has drawn $15 billion in deposits, its AVSs likely won’t need $15 billion in security, meaning yields could be rather low.
“Any AVS that aims to provide a sustainable yield needs to cap the deposit amount,” they wrote.
Jito co-founder Lucas Bruder also told me “several” AVSs and liquid restaking token providers are interested in using Jito restaking.
That said, Solana’s restaking race is in fairly early innings. Solayer, the other major Solana restaking outfit reported to have raised funding from Polychain, has created some buzz but has yet to release any code.
JitoSOL is Solana’s most widely-held liquid staking token, and it is noteworthy that Jito has already thrown its hat in the restaking ring. This is perhaps in contrast to Ethereum’s liquid staking giant Lido, which missed the early boat on Ethereum restaking and has now latched onto EigenLayer competitor Symbiotic.
— Jack Kubinec
Zero In
Solana just surpassed BNB to become the fourth-largest cryptocurrency by market capitalization, according to CoinMarketCap.
CoinGecko still lists solana as the fifth-largest crypto, but if current trends hold, SOL will soon pass the Binance-created token on both platforms.
Market cap is an easy-to-cite statistic for the relative significance of blockchains, and solana’s growth has been something to behold. On Jan. 1, 2023, it was the 17th-largest crypto, trailing the likes of tron, polkadot, and shiba inu. SOL’s market cap has multiplied by nearly 25x since then.
— Jack Kubinec
The Pulse
ICYMI this week in Solanaland:
- Hamilton Lane, a $920 billion asset manager specializing in private markets investments, launched a fund on Solana through Libre.
- Early Solana DeFi protocol Solend rebranded to Save and announced the creation of a stablecoin, liquid staking token, and memecoin platform.
- The startup AgriDex settled an agricultural trade on Solana.
- SOL’s bullish July continued, with the asset’s price sitting above $180 early Friday afternoon.
- Helius and Light Protocol’s zk compression framework went live on Solana devnet.
- Solana passed Ethereum layer-1 in trailing 30-day decentralized exchange volume.
- Smart wallet platform Privy launched support for Solana.
- Solana wine tokenization platform dVIN came out of stealth.
— Jack Kubinec
One Good DM
A message from Stijn Paumen, CEO of Helio:
Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.
Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.
Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.
The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.
