Howdy!

In yesterday’s edition, I accidentally referred to Moonwalk Fitness’ Caitlin Cook as Caitlyn Clark, the women’s basketball phenom. The funny thing is that I made the typo, noticed the typo and laughed at myself, and then proceeded to not remove the typo. I’m my own worst enemy sometimes.

In today’s (hopefully typo-free) edition, we have Jito possibly changing its MEV fee scheme, ETH vs. SOL being closer than it appears, and Realms spinning out from Solana Labs:

Jito DAO may start taking in MEV fees

Solana could be seeing a substantial change in who benefits from the blockchain being built.

A proposal from Jito’s DAO would send 3% of all maximal extractible value (MEV) tips collected by the protocol to the DAO treasury and to TipRouter, an in-house program developed for Jito’s forthcoming restaking platform. 

Jito Labs has also pledged to reduce its own tip share from 5% to 3%, meaning 6% of all Jito MEV tips would be taxed under the new program, up from 5% currently. The proposal estimates the fee switch would generate $22.8 million in annual revenue for the recently-formed Jito DAO.

MEV refers to the potential profit generated by reordering transactions within blockchain blocks. Jito created a validator client, which is the software validators use to connect to the blockchain, in which “MEV searchers” bid to have validators process their profitable sequence of transactions first. Searchers can add tips to sweeten the deal, and these tips have proven to be quite lucrative for validators, especially when there is more interest in trading on Solana.

From March through September of this year, Jito MEV tips generated roughly $232 million in economic value, per Blockworks Research. Solana processed $20 million in Jito tips last week alone amid a memecoin-driven trading surge. MEV tips accounted for 54% of Solana’s real economic value (REV), a Blockworks Research metric that estimates how much income blockchains are generating.

The Jito DAO proposal would represent a shake up in how one of the Solana blockchain’s biggest income generators divvies up its spoils. This chart tells an interesting story in that regard:

As you can see, SOL stakers’ income from Solana has slowly been growing in recent months, at the expense of validators and SOL that is burnt, or removed from circulation to slow down inflation. 

Jito Labs’ 5% of MEV tips currently earns it around 2.5% of Solana’s REV. With the pending proposal, less REV would go to Labs and some would go to the DAO. Whether you think stakers or validators should be receiving more REV, or if Jito deserves a bigger share of the Solana network’s economic value, is all a question of values (for what it’s worth, I argue validators should be better rewarded in this podcast episode with Dan Smith from Blockworks Research). 

Another recent shift in Solana stakeholder revenue came from Solana Improvement Document (SIMD)-0096, which would send priority fees entirely to validators rather than burning half.

Most of the new tip structure would go to Jito’s DAO, but 0.15% would also go to TipRouter, a Jito-conceived protocol which will “programmatically” distribute MEV tips. The TipRouter network will run as a node consensus network (NCN) on Jito Restaking. 

In a sense, TipRouter can be thought of like EigenDA on EigenLayer, as an early restaking service built by the restaking platform.

This is all subject to a vote from Jito governance. But because the protocol is basically asking Jito DAO whether or not it wants to receive an estimated $22.8 million annually, I’d venture that the proposal has a pretty good chance of passing.

— Jack Kubinec

Common knowledge holds that SOL has outperformed ETH this market cycle — but has it?

This chart posted by GSR research head Brian Rudick shows that the two biggest altcoins have performed pretty similarly since the crypto market’s last all-time high in November 2021. 

SOL was “disproportionately impacted” by the fall of FTX, Rudick said, so its performance has been skewed by its recovery from 2023 lows. But zooming out, the two network tokens have tracked more closely than recent sentiment might lead you to believe.

— Jack Kubinec

Realms is going rogue. Well, sort of. On Tuesday, Realms — the decentralized governance platform for DAOs — announced that it has officially spun off from Solana Labs to form the Realms Today Trust. This isn't just a paper shuffle — Realms is launching a forked version of the SPL-Governance program, which is the core framework used by DAOs on Solana to manage decision-making and voting. It only sounds like a big deal because it is.

Realms is now in the hands of developers @Dean_Machine, @Sebastian_Bor, @pepeneif, and @ABrzezinski. The new focus? Building tailored front-ends for different DAO use cases, moving away from the overwhelming 'one-size-fits-all' governance toolkit.

Sentiments on X were predictably buzzy. @George_harrap admitted, “I didnt think realms was still actively developed. cool to see homies, looking fwd to trying out some of this!” @streamflow_fi cheered, “Making waves, frens! We're excited to see what the future holds!” while @civickey chimed in with “Congratulations to the new management team! Through it all, Realms continues to lead the governance space through innovation.” @AthensDAOx joined in saying, “Godspeed on this journey for moooaaar decentralization in Solana!”

Alongside the R.E.D. (Realms Ecosystem DAO) grants program, Realms plans to introduce services that simplify DAO management — think trust setup, banking, and even credit cards backed by treasury funds to ease reimbursements. It has also launched the Realms Accelerator, supporting fresh projects like community engagement platform @oh_fosho and financial literacy educator @marshmallow_xyz.

It's great to see Solana governance getting an upgrade, now with Realms at the helm.

— Jeffrey Albus

A message from Andrew Thurman, contributor to the Jito Foundation: