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Breakpoint 2023: Jito Stakenet: A Protocol for Timeless Liquid Staking Tokens

Published on 2023-11-09

Jito Labs introduces Stakenet, a decentralized protocol aiming to revolutionize liquid staking tokens with a self-sustaining model for enhanced security and longevity.

The notes below are AI generated and may not be 100% accurate. Watch the video to be sure!

Summary

In a detailed presentation during Breakpoint 2023, Lucas Bruder, CEO of Jito Labs, introduced a groundbreaking innovation in the domain of liquid staking tokens: Jito Stakenet. As a self-sustaining protocol designed for the Solana blockchain, Stakenet is geared toward rectifying the pitfalls of current liquid staking solutions. He thoroughly elucidated how the protocol is constructed to be decentralized and transparent, thereby ensuring timeless liquid staking tokens. This talk is significant for users interested in DeFi and cryptocurrency staking as it promises to provide a secure and efficient method to engage in staking activities without being bound by traditional barriers.

Key Points:

Jito Labs and the Stakenet Protocol

Jito Labs has been a key player in the blockchain space, with significant contributions to the Solana ecosystem. Their latest project, Stakenet, aims to overhaul liquid staking tokens by creating a protocol that eschews centralization and inefficiency. The idea is to produce a decentralized, transparent, and intelligent system that allows liquid staking to exist perpetually on the blockchain, solving current issues that entail relying on centrally operated stake pools, which creates security risks and diminishes the ethos of DeFi.

The Importance of Decentralization and Security

The central message of Bruder's presentation is the significance of decentralization in securing the Solana network. Stakenet ensures that no single point of failure exists by distributing control amongst a network of keepers rather than relying on a central admin with a hot wallet. This decentralized approach prevents a multitude of risks, including the potential for an admin's key pair to be compromised, which could lead to network attacks or censorship.

Stakenet's Components

Stakenet is composed of a keeper network and on-chain programs to operate stake pools transparently and intelligently. Bruder highlighted two main programs: the validator history program, which stores cryptographically verified performance data of validators, and the steward program, which governs the stake pool's logic. This design allows for customizable staking strategies and provides vast amounts of on-chain data for stakeholders to audit and utilize.

Facts + Figures

  • Jito Stakenet aims to provide a self-sustaining and decentralized protocol for liquid staking tokens on the Solana blockchain.
  • Jito Labs has built MEV extraction systems on Solana and contributed to the Solana MEV-enabled fork called Jito Solana.
  • They report that Jito Solana is currently running on 192 validators, securing approximately $6 billion of Solana with 40% of stake.
  • Jito Sol has seen a 200% growth in the past month, with right under 5 million Sol TVL, approximately $175 million in value.
  • Stakenet is lauded for its open-source, transparent, and decentralized nature, with a goal to have liquid staking tokens that can live indefinitely on Solana.
  • The validator history program, storing validator performance data on-chain, is already operational since September 6.
  • Stakenet strives to eliminate the potential cyberattacks and vulnerabilities associated with centrally operated stake pools.
  • The steward program will facilitate the intelligent operation of stake pools, with governance and algorithms optimizing validator performance.
  • Economic incentives and rewards structures are being considered to ensure long-term viability of the system.

Top quotes

  • "GEDO Sol tries to balance that by incentivizing decentralization..."
  • "Stake pools are run essentially. They're centrally operated right now by teams and this leads to all sorts of issues."
  • "We think that this is a huge step forward in liquid staking."
  • "All the code will be an anchor. It'll be anchor verified. All that good stuff."
  • "Validators that are doing good work."
  • "You can figure out validators' location."
  • "If you're interested in staking and you think that you can write a better staking algorithm in this, then you can use that data on chain and look at it."

Questions Answered

What is Jito Stakenet?

Jito Stakenet is a decentralized protocol created by Jito Labs that aims to advance the way liquid staking tokens operate on the Solana blockchain. It is designed to be self-sustaining, transparent, and intelligent, allowing for stake pools to operate indefinitely without being dependent on a central administrative entity's security and decision-making.

Why is decentralization important in Jito Stakenet?

Decentralization is crucial in Jito Stakenet to eliminate single points of failure and reduce security risks. Rather than relying on a central admin, the responsibility is spread across a network of keepers, ensuring greater security and resilience against attacks or censorship, which is vital for the integrity of the decentralized finance (DeFi) ecosystem.

How does Stakenet differ from current liquid staking solutions?

Stakenet differs from current liquid staking solutions by ensuring that stake pools can run perpetually on the blockchain. It accomplishes this by having all operations, including delegation logic and validator performance tracking, occur on-chain and verifiable by anyone. This is in contrast to existing systems that rely on off-chain APIs and databases, posing risks and lacking transparency.

Who can contribute to the operation of Jito Stakenet?

Anyone can contribute to the operation of Jito Stakenet by participating in the network of keepers. This participation contributes to the maintenance of the validator history program and the steward program, which together enable the intelligent and decentralized running of stake pools.

How can Jito Stakenet ensure liquid staking tokens to be 'timeless'?

Jito Stakenet ensures that liquid staking tokens can be 'timeless' by embedding the operation and logic of stake pools into on-chain programs that can autonomously execute governance decisions, adapt to changing conditions and operate without the need for manual intervention, ensuring liquidity staking tokens continue to thrive on the Solana blockchain indefinitely.

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