With memecoin mania in full swing on Solana, Jito validators are now receiving more tips from MEV than transaction fees combined. This was something we always highlighted when people would critique Solana’s low-fee architecture as being “unsustainable”. The network fee is just one aspect, the other is the economic value you are able to create on that network and the premium people will pay for it. Low fees drive more volume and thus more economic activity and thus more MEV.
The number of Jito bundles is also going crazy over the past week to no surprise (picture courtesy of buffalu: https://twitter.com/buffalu__/status/1765474424797430092
Now, is this all fine and dandy? It’s definitely a good sign that people are willing to pay substantial fees to use Solana, but the fee markets and deteriorating UX due to all of this MEV is still a concern. Sandwiching has gotten so bad on Solana recently that Eugene from Ellipsis (Solana’s top CLOB) has even proposed socially “banning” third party mempools like Jito to buy more time.
Of course, if Jito were to leave there’s nothing really stopping others from forking (as one already has) and trying to recreate the same. The reality is that, regardless of your protocol’s design, MEV is inevitable. In theory, Solana’s continuous block production does stop a lot of MEV like sandwiching, but if you can go out-of-protocol to extract this, people will.
If you’re trading on Solana, you probably have a lot of failed transactions these days if you don’t significantly increase your slippage. The game has changed.
Where does it go from here? I really don’t know. But in the near-medium term I would expect Jito tips to continue up and to the right. There’s still a lot that needs work but in the meantime people still want to use it, which is a good thing.
