Discover Jito restaking: Unlocking additional rewards on Solana
Staking has become a fundamental pillar of blockchain security and tokenomics. It enables users to help secure networks while earning rewards.But what if those staked assets could do more? What if they could secure additional networks, generate extra rewards — without being unstaked?
Enter restaking, a concept that first gained traction with EigenLayer on Ethereum and now arrives on Solana with Jito Restaking. Restaking enables already-staked assets to be used as collateral for securing additional networks, unlocking new opportunities for both stakers and networks.
These networks can launch faster and focus on their core product without building a consensus, an infrastructure, and a network of validators from scratch.
The restakers benefit from it by earning extra rewards from validating these new networks in addition to the rewards they earn from staking on the underlying L1 blockchain.
Jito, a key player in Solana’s MEV and staking ecosystem, is bringing this model to life with Jito Restaking. In this article, we’ll break down what Jito Restaking is, how it works, and what it means for Solana stakers, validators, and DeFi users.
What is Jito Restaking?
Jito Restaking allows staked assets (currently liquid staking tokens such as JitoSOL, KySOL, mSOL, bSOL) to be re-used to help secure additional Node Consensus Networks (NCNs). These NCNs perform various blockchain-related services, such as securing data, routing transactions, or providing decentralized price feeds.
By restaking assets in a Jito vault, participants receive Vault Receipt Tokens (VRTs). These VRTs can then be used in DeFi applications, providing additional liquidity and utility without sacrificing staking rewards.
For Solana, this means that validators can increase their rewards while still participating in the core security of the network, making staking even more capital-efficient.
Key Benefits:
- Earn extra rewards on top of traditional staking.
- Maintain liquidity via VRTs that can be used in DeFi.
- Enhance security for new blockchain services without unstaking assets.
Who are the actors in Jito restaking, and how do they interact together?
Jito (Re)staking introduces a flexible infrastructure involving restakers, vaults, VRTs, NCNs, and operators with the goal of enhancing staking and restaking processes in a decentralized and secure way:
Restakers
Restakers delegate their tokens (e.g.,SOL, JitoSOL, KySOL, mSOL, or bSOL) to Node Consensus Networks (NCNs) through the Vault program. Restakers receive liquid restaking tokens (VRTs) in return, which they can use in DeFi applications.
Vaults
Vaults manage the minting, burning, and delegation of Liquid Restaking Tokens (VRTs). Vaults enable customizable delegation strategies, and enforce slashing conditions defined by NCNs.
Vault Receipt Tokens (VRTs)
VRTs are liquid representations of assets deposited into Jito (Re)staking vaults. They allow users to maintain liquidity while their underlying assets are staked, enabling participation in DeFi activities. VRTs can be traded, used as collateral, or redeemed for the original assets.
Node Consensus Networks (NCNs)
NCNs are the entities that participate in consensus operations, such as securing data or providing services like price feeds.
They interact with users and operators to manage risk through slashing conditions, ensuring that operators maintain performance and integrity.
Node operators
Node operators run the node infrastructure that powers NCNs. They participate in consensus, run and maintain the infrastructure and may face slashing penalties for bad behavior (e.g., downtime, incorrect data).
Operators have the ability to choose which Vaults and NCNs they support, allowing them to manage their risk and align with preferred slashing conditions.
Jito Tip Router NCN: The first live use case
The first operational NCN in Jito Restaking is the Jito Tip Router NCN. This service optimizes the routing of transaction tips within Solana’s MEV ecosystem. The goal is to fairly distribute transaction fees among validators, stakers, and network operators, maximizing efficiency.
How the Tip Router NCN distributes rewards:
- 3% of all tip revenue is collected as a fee.
- 0.15% flows to SOL vault operators (split between stakers & node operators).
- 0.15% flows to JTO vault operators (split between stakers & node operators).
- The remaining 2.7% is directed to the Jito DAO.
This model ensures that restakers and validators are properly incentivized, while the Jito DAO can continue funding ecosystem growth and research.
You can find the complete list of upcoming NCNs here.
Potential Risks and Considerations
While Jito Restaking introduces exciting opportunities, users should be aware of the potential risks:
- Slashing Risk: NCNs enforce slashing conditions to ensure validator integrity. Poorly performing node operators could lead to partial loss of staked assets.
- Liquidity Risks: While VRTs offer liquidity, they may not always be redeemable at a 1:1 ratio, depending on market conditions and demand.
- Smart Contract Risks: As with any DeFi integration, vulnerabilities in vault smart contracts or governance failures could introduce risks.
- Economic Centralization: If only a few NCNs attract the majority of restaked assets, it could lead to centralization concerns.
Users should always diversify their staking strategies and monitor validator performance and slashing conditions.
Please reach out to Kiln at support@kiln.fi or through the form if you want to know more about Jito restaking.
About Jito
Jito (Re)staking is a multi-asset staking protocol for Node Consensus Networks. The protocol tokenizes staked assets as Vault Receipt Tokens for enhanced liquidity and composability. Node consensus networks can use Jito (Re)staking to easily customize staking parameters, slashing conditions, and economic incentives to tailor their security and tokenomics.
About Kiln
Kiln is a leading digital asset rewards management platform, enabling businesses to earn rewards on their digital assets or white-label earning functionality into their products. Our API-first platform allows fully automated management of validators, rewards, data, and commissions. Kiln manages over $13 billion in crypto assets, with a strong track record on Solana network operating around 2.5% of Solana’s total staked assets. Kiln is also SOC 2 Type II certified.
