A Comprehensive Analysis of the Evolution and Pros and Cons of MEV on Solana

Author: Shisi Jun

Introduction

Solana has been around for five years, and Jito (the leading MEV infrastructure on Solana) has developed in less than three years, rapidly increasing its market share from an initial 15% to the current 95%. It can be said that most of the meme trading on Solana goes through Jito!

No ads throughout, please readers take a seat, bookmark this, and let Shisi Jun delve into the underlying principles, gradually revealing:

1. What is Jito-Solana? Why has it dominated the market in just two years?
2. The differences in core mechanisms between Solana and Ethereum.
3. Why are your trades always getting squeezed?
4. How will the MEV landscape on Solana develop in the future?

1. What is Jito-Solana?

Of course, Jito-Solana (the leader with a 95% market share) is not the only player providing MEV infrastructure on Solana; there are others like Paladin, Deeznode, BlockRazor, BloxRoute, Galaxy, Nozomi, etc., each with different entry points.

This article will focus on the development history and technical principles of the core leader, and later comment on the strengths and weaknesses of these other players.

1.1. Timeline of Jito's Development

First, let’s take a look at the remarkable speed of its market share development through a timeline, paying attention to the staking rate and related partners.

• Established at the end of 2021
• Launched on the Solana mainnet in June 2022, with 200 validators covering 15% of the staking volume by September of the same year
• From 2022 to 2023, it raised funds, iterated, and collaborated with the Solana Foundation, with the Jito client being included in the official recommendations
• In 2023, TGE, staking Jito gained MEV yield boosts, forming a staking-restaking model.
• In Q1 2024, due to strong community opposition, Jito-Solana closed the channel for sending transactions to Jito-Blockengine.
• In Q2 2024, the number of cooperative validators exceeded 500, covering 70% of Solana's MEV, processing 3 billion transactions in 2024
• By Q1 2025, the staking coverage had reached 94.71%. Today, the importance of cross-chain bridges remains self-evident.

【Image source: https://www.jito.network/zh/stats/】

Thus, it can be said that Jito is the leader in the MEV ecosystem on Solana, having established a solid support base from Solana validators over the past three years, ensuring that the vast majority of transactions go through Jito's system.

Its system diversion has significantly reduced Solana's downtime,

It has provided high-profit yields for the squeezers,

And it has allowed Solana validators to gain an additional 30% in MEV profits, and do so steadily.

Moreover, it has transformed from an initial dragon-slaying warrior into a dragon itself, oscillating between the roles of warrior and dragon, sometimes fierce, sometimes benevolent.

In the current mainstream meme narrative of the market, it has become a two-faced player that caters to both sides.

1.2. What Kind of System Has Jito Built?

It actually consists of three core services: block-engine, jito-solana, and jito-relayer. Their relationships are illustrated in the following diagram:

[Image source: Shisi Jun's creation]

First is the block-engine, which is an auction system.

A typical scenario allows squeezers to submit transactions in a fixed order of up to five transactions through a Bundle package for auction, where they can also send an additional transaction called Tips to validators as a small tip, encouraging validators to prioritize packaging that Bundle.

Other scenarios include DEX platforms like OKX, GMGN, and BN Wallet, where to avoid users being squeezed, they can add tips to users' transactions, taking the auction route to expedite the transaction's on-chain process.

Next is jito-solana, which is a client that replaces validators for transaction validation and block production.

Its core function is to allow validators to receive Bundle packages sent from the block-engine, thereby prioritizing the processing of these transactions to complete the transaction sequence. At its peak, the number of Bundles processed daily reached 25 million (recently around 10 million), with nearly every transaction being profitable.

The tips collected ultimately go to a unified account, later distributed to validators at 95-97%, with Jito itself taking 3-5%.

The most controversial aspect is the jito-relayer, which can be understood as a gateway for validators to receive transactions.

Initially, when this relayer received transactions, it would delay them by 200ms before sending them to jito-solana, while synchronously sending transactions to the block-engine without delay, clearly selling order data. Thus, Jito's early rise stemmed from the profit margin at the expense of users.

It should be noted that as of March 2024, this rule was officially announced to no longer transmit data, but to this day, the jito-relayer still has the forwarding switch and the 200ms delay setting.

So, whether validators are selling user data remains unknown, accompanied by the closed-source nature of block-engine.

1.3. How Much Money Has the Jito System Made?

Clearly, the profit margin from transactions being squeezed, combined with the introduction of the tips mechanism, has led to its skyrocketing market share. Who would refuse an additional 30% in profits?

In the past year, the total number of Bundles initiated reached 4.3 billion, generating a total tips revenue of 5.51 million SOL. At a market price of 140, this has resulted in an additional revenue of 7.7 billion USD from Jito's infrastructure.

[Image source: https://explorer.jito.wtf/]

However, not all of this revenue goes to Jito as the system provider; as mentioned earlier, Jito and validators share a 3-5% platform profit, so Jito's actual revenue over the past year was around 200,000 to 270,000 SOL, approximately 35 million USD.

This is equivalent to the revenue of a popular mobile game in two days, which might not seem high? Not necessarily, as this is a solid platform revenue, especially when most industries in the web3 space cannot specify their actual revenue.

It has achieved oligopolistic dominance, with exclusivity over other competitors (after all, validators can only run one client), and the revenue is derived from the recent meme fatigue. If Solana can explore more trading scenarios in the long term,

Even in the absence of market competitors, the platform could adjust profit sharing from 3-5% to 30% (which is a common platform fee rate after monopolizing the market in internet applications).

This could lead to very high PE estimates; based on a 30 PE for web2 industry leaders, the valuation could reach 1 billion, while using a common web3 expected monopoly and potential industry growth of 300 times, it could reach 10 billion. Similar valuation methods can be referenced in "Super Intermediary or Business Genius? A Look at the Leading Cross-Chain Bridge LayerZero from V1 to V2 Over the Past Year."

However, we are not here to outline such macro conclusions, nor just to understand it through a fanciful virtual valuation. Instead, we hope to delve into the details to understand its deeper principles and analyze the future development of the market.

1.4. What Demand Scenarios Can Jito Support?

This topic actually revolves around the types of MEV attacks currently present.

The most common is the Frontrun type, such as:

• Arbitrage, risk-free arbitrage, similar to Ethereum.
• Sandwich Attack, a typical sandwich attack, with sandwich profits on SOL around 2 USD each.
• JIT - Just in Time liquidity, providing instant liquidity operations.

Another major category is the Backrun type:

This refers to inserting arbitrage trades after target transactions (such as large DEX trades or liquidation events) to profit from market fluctuations caused by the target transaction. Specific scenarios include:

• DEX arbitrage: Any transaction can create a profit margin between different DEXs. Thus, following closely to eliminate the profit margin.
• Liquidation following: After a user's collateral is liquidated, a follow-up trade purchases assets at a discount and resells them.
• Oracle delay: Executing reverse operations based on outdated prices before the oracle updates the price.

Aside from obvious attack scenarios, other acceleration scenarios are also suitable for Jito. Therefore, it cannot be said that Jito only serves MEV; rather, it serves all scenarios with acceleration and bulk trading bundling needs.

For example, during the lively opening activities on Solana, market makers will utilize the bundling and acceleration mechanisms to open and deploy chips.

Similarly, major exchanges can also avoid being attacked by bundling tips for users' large trades. However, it should be noted that these measures cannot prevent validators from acting maliciously (in reality, you cannot determine which validator is acting maliciously).

2. In-Depth Comparison of Solana and ETH System Differences

Why is Jito so suitable for Solana?

Why is there no similar competition among bulls in the ETH market?

We need to start from the system differences between the two. You may have heard of the POH consensus many times, but the transaction lifecycle on Solana is different from that of ETH, which has led to their completely different ecosystems.

2.1. MEV Landscape on ETH

Two years ago, on the first anniversary of Ethereum's merge, I systematically analyzed: "The MEV Landscape One Year After Ethereum's Merge."

In it, you can clearly see that Ethereum's system lifecycle is very clear:

[Image source: https://mp.weixin.qq.com/s/IepFvVpIxLpkXV5qgF68Rw]

This is due to two very important points that emerged after the merge regarding MEV:

1. The block interval on Ethereum has become stable. It is no longer a relatively discrete random situation of 3-30 seconds, which has both advantages and disadvantages for MEV. Although searchers no longer need to rush to see slightly profitable transactions and can continuously accumulate a better total transaction sequence to hand over to validators before block production, it has also intensified competition among searchers.

2. Miner incentives have decreased. This encourages validators to be more willing to accept MEV transaction auctions, allowing MEV to reach a 90% market share in just 2-3 months.

Thus, there are roles such as Searcher, Builder, Relay, Proposer, and Validator.

The lifecycle of each block is:

1. Builders create a block by receiving transactions from users, searchers, or other (private or public) order flows.
2. Builders submit the block to a relay (i.e., there are multiple builders).
3. The relay verifies the block's validity and calculates how much it should pay the block proposer.
4. The relay sends the transaction sequence package and revenue price (also the auction bid) to the current slot's block proposer.
5. The block proposer evaluates all bids received and selects the sequence package that yields the highest profit.
6. The block proposer sends this signed header back to the relay (completing this round of auction).
7. After the block is published, rewards are distributed to builders and proposers through the transactions within the block and block rewards.

Therefore, I believe that the MEV on Ethereum is necessarily characterized by intense internal competition between Searchers and Builders.

And the actual data supports this: the overall yield has significantly decreased by 62%.

• In the year before the merge, the average profit calculated from MEV-Explore was 22 MU/M (from September 2021 to September 2022 before the merge, the figures included Arbitrage and liquidation modes)
• In the year after the merge, the average profit calculated from Eigenphi was 8.3 MU/M (from December 2022 to September 2023, the figures included Arbitrage and Sandwich modes)

Of course, you might think that isn't the MEV-boost on ETH growing faster? Indeed!

But rapid growth does not equate to high profits. We have already analyzed what the profits are, and the rapid growth of Ethereum stems from decreased miner incentives, encouraging validators to be more willing to accept MEV transaction auctions, allowing it to reach a 90% market share in just 2-3 months.

【Image source: https://mevboost.pics/】

Moreover, the most significant difference between ETH and Solana is that there are multiple builders, and their different final yields influence the decisions of validators, thus forming competition among builders.

Due to competition, the profits of searchers are continuously compressed, and beyond algorithms, the only factor influencing builders is the volume of data.

Searchers that cannot compete will exit the market, while builders that can access large amounts of data often have their own infrastructure and market reputation, forming a stable total order flow rather than relying on the propagation of the Mempool between nodes.

This leads to the conclusion that the MEV market on ETH is comparatively more market-oriented than Solana's purely oligopolistic platform system, thus providing users with a bit of breathing room.

2.2. Block Mechanism of Solana

After understanding the ETH system, please clear your mind, as many aspects of Solana differ from Ethereum, even the traditional blocks.

It is precisely these mechanisms that are the root cause of rampant MEV on the Solana system.

We can quickly compare these four core characteristics using a table:

The key lies in the absence of a memory pool and direct connection to the leader. The former brings transaction delays, while the latter allows for validator malfeasance.

2.2.1. Solana Actually Has No Memory Pool

The previously mentioned 200ms delay of Jito and its synchronous transmission to the block-engine can be considered a form of monetized memory pool. Objectively speaking, how would the absence of a memory pool mechanism (which is actually an optimization feature for Solana's speed and privacy protection) affect the transaction block production mechanism?

If you are an ordinary user initiating a transaction to a certain node, it is equivalent to broadcasting.

Under default configurations, this node will immediately look for the current leader and the next leader (a total of two validators) to submit your transaction.

As for the transaction order, this needs to distinguish between native Solana and jito-solana:

• Native Solana: Once the leader receives the transaction, it will theoretically include it in the transaction sequence according to FIFO (first in, first out); whoever arrives first at the leader will be included, combining with the POH mechanism, effectively dividing a block into numerous small ticks for synchronization.
• Jito-Solana: Normal transactions reaching the leader have a queue calculating the current gas limit (called CU in the SVM system, computational resources), which has a lower weight than Bundle transactions. Thus, ordinary transactions will be behind Bundle transactions. If it is the same transaction (i.e., someone is attacking you), Jito-Solana will prioritize packaging the transactions that are attacking you. Here, it allocates 80% to Bundles and only 20% to traditional ordinary transactions.

Therefore, Solana has no memory pool; it merely reduces public transmission rather than completely eliminating it (which is impossible).

This characteristic further makes Searchers on Solana exclusive to high-end players.

2.2.2. The Subsequent Block Leader Can Be Predicted

Validators are randomly sampled from 1300 validators every epoch (approximately 2-3 days), using the VDF algorithm, with a staking-weighted effect.

For example, if the total staked SOL is 2 million and you stake 200,000 SOL, you will have a 10% chance of being selected each time.

If selected, you will be responsible for producing blocks for the next four slots (the equivalent concept of blocks in Solana) for about 1.6 seconds.

This speed is very fast, so any effective node can calculate who the subsequent validator will be and attempt to connect with it to submit user transactions. Due to network delays, it is also easy for transactions to miss the current leader and arrive at the next leader.

2.2.3. The Leader's Connection Strategy Also Has Staking Weighting

This is the SWQoS mechanism, where the current leader's p2p connection capacity is 2500, with 80% (2000 connections) reserved for SWQoS (i.e., nodes that have staked).

The remaining 20% (500 connections) are allocated for transaction messages from non-staked nodes.

It sounds confusing, but this is a new mechanism to prevent spam and enhance Sybil resistance, aiming to allow the leader to prioritize processing transaction messages that come through other staked validators.

2.3. Why Is It Easy to Be Attacked on Solana?

Many ordinary users, in order to prevent their transactions from being squeezed, wonder if they can offer high Priority Fees (transaction priority fees) to ensure miners package their transactions first, thus avoiding being squeezed?

The truth is, this has a slight effect, but not much; in extreme cases, it can even backfire.

[Image source: https://explorer.jito.wtf/feestats]

From the above image, we can see that offering Priority Fees is a similar proportional probability, while tips can easily fluctuate and compete. Moreover, tips are essentially a separate transaction; from an external perspective, it is impossible to know which transactions are in the Bundle.

Thus, no matter how high your priority fee is, it only ranks in the last 20% queue of the validator for this slot's block production. However, for a Searcher who can discover your order from the beginning and launch a squeeze attack against you, having a Bundle with high Priority Fees actually raises the average CU unit price, naturally prioritizing it in the validator's Bundle consumption queue, and synchronously broadcasting.

Similarly, other mechanisms on Solana, at first glance, seem to benefit users by making it harder for them to be squeezed. So why is MEV rampant on Solana? The key points include:

Difficult to Prove Malfeasance by Leaders

Both leaders A and B can access all user transactions, so the cost and ambiguity of malfeasance by leader B are lowered.

Consider this: as the second leader, if I see a profitable transaction, I can quickly construct a squeeze attack and send it to the block-engine for auction. Under the 80% Bundle priority mechanism, my attack will take effect first, while the transaction is packaged by leader A.

So how can you determine that I, leader B, am the attacker?

Of course, you could argue that ultimately leader A packaged the attacking transaction, so he is the attacker. However, under default logic, 95% of validators would do the same, reducing the chances of intervening against them.

Punishing A is indeed unreasonable, as there are other links in between, which may also lead to information leaks.

Transaction Retry and Long Wait Times

Although each slot lasts only 400ms, have you ever experienced your Solana transaction inexplicably lingering for over 23 seconds?

You might hastily assume that the node you connected to is underperforming, but that is not the case.

Due to the SWQoS mechanism, if you connect to an ordinary node, it will calculate and find the leader to submit the transaction. However, during network congestion, only 500 of the connection pool is allocated for ordinary nodes. If it fails to connect and submit, it will retry all transactions for that node every 2 seconds.

These parameters are the default settings for Solana nodes, and different nodes can have different configurations (for example, changing the retry to 1 second).

How can ordinary users measure the probability of encountering retries?

As of March 2025, Solana has approximately 1300 validators and 4000 RPC nodes.

So, when congestion occurs, there will be 2700 nodes competing for 500 connection slots within 1.6 seconds (4 slots). If this leader's space is not filled, it will keep searching for the next one.

In this illusion, if your transaction lingers for a long time in the node, how will they treat it? If your CU price is not high enough and the leader is already full, and they see the transaction, what should they do?

Yes, sell data. For high-traffic nodes, some searchers may buy order flow for as much as 10,000 USD a month.

Meme Narrative and Staking Yield Scale

First, the meme market phase: Currently, the mainstream narrative on Solana is the Meme ecosystem, leading to shallow pools on-chain, causing users to set wider slippage for transactions to succeed, thus amplifying the attack yields for searchers (recent samples show profits can reach around 2 USD, compared to nearly 0.1 USD on ETH, which is quite high).

[Image source: https://www.jito.network/zh/stats/]

Secondly, the staking yield for Solana validators is around 8% annually, a relatively stable figure over the years.

The annualized yield from MEV enhancement is about 1.5%.

Combining these two, it means that stakers running the jito-solana client can increase their staking yield by an additional 15-30%. In certain market conditions, the yield from MEV can even exceed the staking yield itself.

2.4. Why Are Solana Validators Prone to Betrayal?

The profits are simply too high, and the costs are equally high, forcing validators to continuously expand their revenue sources.

Validators incur an annual voting cost of about 300-350 SOL (estimated at 42,000 USD at a market price of 140 USD) and hardware costs of 4200 USD (not including dynamic network costs).

The significant node configuration burden on Solana requires node performance to be at least 24 cores, 256GB of memory, and 2*1.9TB NVME.

Currently, 14% of validators use custom Latitude models, which require about 350 USD per month.

Ultimately, this has resulted in only 458 of the 1,323 validators on Solana being profitable. This is why the "SIMD-0228 proposal" was voted down.

The outcome shows that this proposal would further reduce block production incentives, inevitably forcing smaller validators to exit, leading to irreversible centralization of the platform. Moreover, as MEV profits increase while the essential work rewards decrease, what do you think will happen?

Let us look at the strategies of competitors other than Jito.

3. Other Competitors of MEV on Solana

3.1. Paladin: VIP Frontrunning and Trade Protection

Current market share: 5%, launched at the end of 2023. As of March 2025, it claims to have deployed Paladin on 205 validator nodes, staking 53 million SOL, with the Paladin client potentially increasing node yields by about 12.5%.

In essence, it is a forked modified version based on the Jito-Solana client.

The core selling points are:

1. P3 Priority Port: Allowing the block leader to open this fast VIP channel, processing transactions according to the original FIFO rules.
2. Identifying and Excluding Squeeze Attacks: Although this initially seems disadvantageous for validator rewards, Paladin validators receive compensation through a trust-based mechanism. Validators avoiding "sandwich" attacks can attract direct trades, thus creating a trust ecosystem and increasing yields.
3. Paladin Bot: This is an open-source high-frequency arbitrage bot that runs directly on the validator node and only activates when that node is elected as Leader. When the Leader has the Paladin Bot, it quickly executes simple and risk-free MEV strategies (such as DEX arbitrage, centralized exchange and on-chain price arbitrage, etc.), directly counting the profits into validator earnings.

As of December 3, 2024, this bot has been officially announced to be removed.

3.2. bloXroute: Network Layer Optimization + Private Channel Assurance

bloXroute Labs is an infrastructure company providing a blockchain data distribution network (BDN), previously accelerating transaction broadcasting and reducing latency on chains like Ethereum.

bloXroute does not directly participate in MEV distribution but can help frontrunning transactions reach the Leader faster by providing faster channels.

Unlike Jito/Paladin, bloXroute does not directly modify the Solana validator client or introduce transaction auction mechanisms, but instead provides faster message channels for all nodes at the network layer.

Its main idea is to relay Solana's block "shreds" (fragments) more quickly to all validators through a globally distributed network of acceleration nodes, reducing the delay in data broadcasting when the Leader produces blocks and preventing forks caused by poor network conditions. Thus, the services provided include:

• Solana BDN Acceleration: According to official documentation, bloXroute Solana BDN can reduce block fragment propagation delays by 30-50 milliseconds.
• MEV-Protect RPC service, similar to Ethereum's protective private transaction ports, indicating that bloXroute plans to allow users to privately send transactions to the Leader through its RPC, avoiding visibility by third parties, thus preventing frontrunning or squeezes.

3.3. BlockRazor: Network Layer Optimization + Private Channel Assurance

BlockRazor is a new MEV infrastructure project established in 2024, with a team mainly from Asia. It positions itself as an "intent-focused network service provider," planning to offer MEV Protect RPC, high-performance network acceleration, MEV Builder, and other services on mainstream blockchains.

Scutum MEV Protect RPC: This is BlockRazor's private transaction gateway service, similar to Flashbots Protect. Users can submit transaction Bundles through Scutum RPC,

BlockRazor ensures that these transactions are not published through the public mempool but are sent directly to block producers to avoid being frontrun or sandwiched.

4. Conclusion

4.1. How to View the MEV Competitive Landscape on Solana?

Just the day before yesterday, a new competitor entered the arena.

Warlock Labs raised 8 million USD on March 27, 2025, aiming to reshape on-chain order flow.

However, it focuses on the Ethereum track, planning to provide some proof of order flow data and register it on-chain to ensure accuracy and responsibility in handling user transactions.

This leads to my viewpoint: a truly good market will continuously see new competitors entering, while an oligopolistic market will lead to challenges for challengers, and what kind of market does the platform layer hope to become?

Let us think deeper about what is truly important in this MEV infrastructure?

Paladin is built on jito-solana, which means that Jito can upgrade to a version that no longer supports the so-called P3 channel, similar to the 3Q battle of the past, where the one with the most essential need (clearly social) wins. The same applies to WeChat banning the sharing of NetEase Cloud Music in Moments; if there are no larger regulatory machines in place, this exclusive competitive strategy can be applied indefinitely across any track. Moreover, Paladin's 5% market share is also due to its early built-in bot enhancing validator profits, although its open-source bot only focused on non-aggressive attacks (i.e., doing arbitrage without engaging in obvious sandwich attacks that harm user interests), it was still pressured by market sentiment to be taken offline.

Additionally, other competitors like bloXroute and BlockRazor are following the acceleration + privacy channel route. The so-called privacy can only ensure that the leader receives the current transaction, thus avoiding the next one from acting maliciously, and providing a direct countermeasure against malfeasance.

The acceleration capability is indeed a solid technical strength today. It is also the focal point of the next wallet/DEX market battle.

Objectively speaking, the original client code of Solana has some historical debts, so there have been instances where people modified the client to lower configurations and speed up synchronization. Additionally, combined with the SWQoS mechanism, validators can also enhance connection stability and success rates.

Moreover, Jito's block-engine system is actually a multi-center system, but even if it is multi-centered (not completely decentralized), single points of failure can still occur. Since it is a core upstream link, once it goes down, it is equivalent to Solana going down.

Thus, to achieve multi-node disaster recovery acceleration, it still needs to go through the system that has been challenged by previous stress tests, which is why Binance Wallet's bugs seem to be more prevalent; many historical technical debts have yet to be resolved.

However, this issue of technical strength will ultimately be resolved.

Any party can perform multi-node global optimization; ultimately, wherever the leader is located, they can establish the shortest path to ensure their transactions reach the leader quickly, and they can also establish multicast strategies to cater to different user needs. The future competitive outcome will inevitably be a result of refined operations.

But what cannot be resolved is the issue of market competition squeezing.

If jito-solana uses its oligopolistic advantage to modify the Bundle priority strategy from 80% to 90%, or even 95%, then ordinary users will have to continuously raise Priority Fees to compete for the remaining 5% CU space.

However, when the overall CU utilization is insufficient, it will ultimately affect the total revenue of validators (and due to a large number of transactions piling up in the unprocessed queue, the motivation for validators to act maliciously will be stronger), so Jito will not initiate such a competitive model unless absolutely necessary.

So why is the market competition on ETH more open, while Solana's competition is more exclusive?

I believe the root cause is the lack of the Builder bidding role.

ETH can have multiple Builders generating multiple final block sequences, while validators merely verify and choose one.

However, Solana only has multiple block-engines (and they are all from the same entity), and the transaction queue provided to validators is essentially a single Bundle (5 transactions), lacking the competitive link of multiple Builders.

Objectively speaking, the development history of ETH shows that this competition will significantly expand validator profits while reducing Searcher profits. When Searcher profits decrease, the instances of attacks will also reduce, ultimately achieving a balance.

In a future where both technology and market are balanced, what will true competitiveness be?

I believe that when the technological gap is bridged along with talent competition and investment, and when the market's centralization and decentralization ultimately influence the overall SOL ecosystem, all these issues will be resolved. Solana has already initiated discussions on multiple Builders and even further discussions on multiple leaders for random block production.

Although multiple leaders also mean more people will access your orders, since the final block producer is randomly selected from multiple queues, it indirectly achieves competition among multiple Builders, and the market impact will follow the same route as before.

Thus, true competitiveness will shift to the data islands of order flow.

For example, Jupiter has already captured over 80% of the DEX market share, making its order flow the most sought-after. It will determine how to balance providing the best prices or randomly selecting "lucky geese" to extract profits, even at the cost of some brand reputation.

I suspect that the reason they do not engage in building MEV infrastructure themselves is that in a developing market phase, no one can claim to be as unassailable as traditional giants, so focusing on profits will give competitors the opportunity to overtake.

Moreover, MEV is always a game theory problem. Once it reaches a monopolistic position, the support from the validators that underpins that monopoly will push the infrastructure to provide profits.

Any dragon-slaying warrior seems to have an unstoppable potential to become a dragon, and to embody both the dragon and the warrior.

Of course, you might say that Jito was initially built as MEV infrastructure, so how could it be a dragon-slaying warrior?

4.2. What Are Jito's Contributions and Drawbacks to Solana?

Much of what has been discussed earlier highlights Jito's drawbacks, so does Jito have contributions?

Objectively speaking, Jito does have contributions.

When I started observing Solana three years ago, I was quite dismissive of it (okay, I admit I was too loud back then), but the root of this analysis was its high downtime rate.

So why was there such a high downtime rate?

On one hand, there were too many pitfalls in the early code, and later it was discovered that money could solve most problems (machine configurations were continuously raised).

On the other hand, the FIFO strategy: when a highly profitable transaction appears on-chain, even if it is just a backrun attack, the closer someone is behind it, the higher the transaction profit.

Clearly, every Searcher would establish a set of infrastructure to send transactions to the leader as quickly as possible, so early leaders were often subjected to flood attacks.

The emergence of the block-engine allowed Jito to further create a bidding link; once you see profit, you can bid for it, thus diverting traffic.

This auction also has the function of intercepting failed transactions, as if your transaction conflicts with someone else's and their price is higher, then since both searchers are squeezing the same user's transaction, there will inevitably be storage conflicts. If you cannot outbid, the block-engine will directly reject your bid, forcing you to raise your price and continue bidding (it may also randomly reject you, leading you to mistakenly believe you must further bid, which is a charming aspect of big data killing familiarity).

Of course, you might counter that why do we still see many failed transactions on Solana?

That’s because the block-engine is multi-centered, and the rapid block production speed of 400ms makes it impossible to achieve fast data synchronization, thus excluding auction error situations that arise between different block-engines.

Therefore, I believe Jito also has merits, as it has significantly reduced Solana's downtime rate.

Beyond downtime, its bundling transactions have also created various application scenarios in the market.

For a market to thrive, it must serve market makers well. The most explosive aspect of Solana is the Meme market, which cannot be separated from the groups that need to "subtly" start collecting low-priced chips at the moment of launch. This is a highly targeted scenario; if the operator of the plate cannot collect enough profitable low-priced chips, they may directly abandon the pump and relaunch.

It is a mutually detrimental situation, as they would waste a launch.

Moreover, there are other scenarios requiring accelerated transactions, such as various DEXs, which now also trust that jito-solana will not blatantly sell data as before. Thus, for high-value transactions, users will give extra tips to take the fast route through the block-engine, occupying 80% of the CU processing queue, thereby enhancing transaction speed and avoiding being squeezed.

Increasing the yields for Solana stakers enhances the overall degree of decentralization.

The data has already been analyzed; Solana's staking yield is around 8% annually, and through Jito's MEV tip yield, it can reach around 10%, which is a decent margin.

Among Solana's 1,323 validators, only 458 are profitable. The others are not entirely unprofitable (otherwise, who would still do it?)—they are either directly malicious, indirectly malicious, or not motivated by profit (such as only wanting to speed up SWQoS). Essentially, the above statistics are based on staking yields, not fully incorporating MEV yields.

Thus, it is Jito's existence that allows the remaining 800 validators to be profitable, making Solana less centralized today.

So, overall, Jito-Solana does have contributions; at least it has not fully adopted exclusive competitive strategies, allowing for third-party entry opportunities at this time.

4.3. How Will the Future MEV Landscape Develop?

I have already mentioned several key points earlier. I believe that what seems like a dominant player with many strong competitors is actually a moment of latent opportunity.

First, because MEV profits on Solana are generally high (around 2 USD, better than ETH's 0.1 USD), the meme trend will continue to accompany different narrative scenarios, leading to eternal trading. Thus, new searchers will enter, although the high order flow acquisition costs on Solana block some small players, competition among large players will also increase with profits.

Second, there is a significant amount of opposition on Solana against MEV infrastructure. This has forced Jito to announce the closure of data selling channels and forced Paladin to remove the built-in bot functionality. In proposals like SIMD-228, there are already passed proposals like SIMD-96.

The rewards validators receive, originally half of the sum of base fees + priority fees, will now only see half of the base fee destroyed. This indirectly increases the rewards for validators packaging normal user transactions, enhancing their motivation to counter Jito's reduction of ordinary transaction weights. New proposals are continuously participating in the macro decision-making game of Solana.

Third, the overall profit margin of MEV is substantial. For example, last year, Jito Labs' revenue in October was 78.92 million USD, double the record of 39.45 million USD set in May, surpassing established DeFi protocols like Lido and Uniswap. Even if Jito itself has to share profits with validators, the overall profit margin represents the lower limit of user losses.

The greater the loss, the greater the motivation; users' expectations for reliable services can also be quantified from this. This presents opportunities for BlockRazor and bloXroute.

Moreover, I am also looking forward to some more cutting-edge explorations:

• Starting from private transactions: There are threshold encryption, delayed encryption, and SGX encryption, which fundamentally require conditions for decrypting transaction information, whether through time locks, multi-signatures, or trusted hardware.
• Starting from fair transactions: There are fair sorting (FSS) and order flow auction MEV Auction, as well as MEV-Share, MEV-Blocker, etc., where the difference lies in moving from completely profitless to sharing profits to weighing profits, allowing users to decide what cost to incur for relative fairness in transactions.
• Protocol-level improvements like PBS, which is currently a proposal from the Ethereum Foundation, but has achieved separation through MEV-boost. In the future, such core mechanisms will transition to Ethereum's own protocol mechanisms.

Most of these have already been proposed within Ethereum itself, but the differences in compatibility have prevented them from surfacing in users' views. However, these are also areas that Solana can learn from.

5. Final Thoughts

The ultimate outcome of competition is often not surpassed by efforts within the same track; the one that takes down Jito will not be the next Jito (it has its merits and drawbacks), but a completely new application form.

In my previous research "Interpretation of the UniswapX Protocol," I summarized the operational process and profit sources of UniswapX, aiming to fully depict the specific yield of MEV, as this is the source it fights against and shares profits with users (essentially sacrificing the real-time nature of transactions for better exchange rates).

Similarly, order book-based exchanges (and even decentralized exchanges) are also good tools to combat MEV. One can imagine that as computational power further increases and daily transactions widen, the AMM mechanism and corresponding MEV attack scenarios will dissipate. However, the order book will face other challenges that are not smaller than the MEV issue.

From the recent turbulence of Hyperliquid, we can see that aside from the concerns of centralization, as the web3 space moves towards compliance regulation, the players at the table have already donned suits and stepped into international halls.

At this moment, compliance is an all-encompassing sword, as it stands on the side of users.