Solana Transaction Volume Surge and Treasury Dilemma
Solana transaction volume has surged over the past three years, and building out tooling for the network has opened a lucrative dilemma: what to do with rapidly accumulating treasury funds.
Jito Network’s Strategic Considerations
For Jito Network, which processes over half of Solana’s transaction fees and has amassed protocol revenues, the question has led some to think of ways to deploy available capital rather than hoarding it.
Proposal by Andrew Thurman
Jito Foundation contributor Andrew Thurman published a comprehensive proposal Thursday, examining how the Jito DAO could make use of its growing revenue streams.
“Jito is in a unique position,” Thurman wrote. “There are not many examples of DeFi ecosystems which have generated as much real value as quickly as the Jito Network.”
Response to Jito Network’s Ascent
The proposal, which Thurman claims represents his views rather than any official position, is a response to Jito Network’s rapid ascent within Solana’s ecosystem.
To date, the protocol receives 4% of all JitoSOL staking rewards, plus 3% of tips distributed via TipRouter, according to a claim from Thurman backed by data from Kairos Research.
Buyback and Barter Mechanism
Central to the proposal is a “buyback and barter” mechanism where protocol fees would be swapped to JTO and strategically deployed to partner DAOs.
Such an approach would remove tokens from circulation while creating “industry-altering handshakes” between protocols, Thurman explained.
Real Yield Gauges System
The proposal also details a “real yield gauges” system inspired by Curve, where JTO holders could vote on directing actual protocol revenue to specific liquidity pools rather than using inflationary rewards.
Thurman notes this would be “close to a novelty in terms of DeFi” as few gauge systems utilize real yield.
Treasury Management Suggestions
For treasury management, the proposal suggests establishing protocol-owned liquidity positions that would generate revenue while ensuring market depth during volatile periods—addressing a critical infrastructure need.
New Decision-Making Framework
Perhaps most significantly, Thurman introduces a new structured decision-making framework that visualizes the balance between “recycling” (ecosystem reinvestment) and “rewards”, moving beyond passive accumulation.
Experimental Nature of Mechanisms
While the proposal examines precedents from protocols like MakerDAO, Raydium, and Jupiter, he also acknowledged the experimental nature of these mechanisms.
“No one knows what they’re doing,” Thurman candidly admits, alluding to how Jito currently navigates pioneering territory as it determines whether to focus on hypergrowth or begin returning value to ecosystem participants.
Edited by Sebastian Sinclair