Kairos Research: Does Solana Need Restaking? The Innovation and Potential of Jito Restaking
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Kairos Research: Does Solana Need Restaking? The Innovation and Potential of Jito Restaking
Jito will have an LRT module that allows others to create and operate LRTs through the Jito protocol itself.
Navigating Web3 tides with focused insightsAuthor: Kairos Research
Translation: TechFlow
A brief analysis of @jito_sol's latest product
Jito restaking combines the best elements of EigenLayer and Symbiotic, with unique and innovative improvements.
While rumors have long circulated that Jito was developing a restaking platform, it’s clear they’ve put significant thought and design effort into their approach.
Like Symbiotic, the vault program will allow customized delegation strategies across multiple operators, thereby diversifying operator risk and increasing exposure to a variety of AVSs.
However, there is a major difference: Jito will feature an LRT module rather than outsourcing LRT creation and transferring value to external protocols. This allows anyone to create and operate LRTs directly through the Jito protocol itself.
This is a key distinction in Jito’s implementation, enabling further vertical value capture across the ecosystem and creating another potential revenue stream for the protocol via a small, reasonable fee (exact percentage TBD).
Another interesting differentiator mentioned by Jito is the ability to create liquid staking AVS tokens that can be effectively utilized in DeFi.
There are still many unanswered questions about how restaking rewards will be distributed to end users, but this is the first known example proposing the minting of liquid receipt tokens for AVSs.
Allowing these AVS tokens to issue liquid receipt tokens could help enhance AVS security while also promoting efficient use of these tokens within DeFi.
This could enable novel restaking strategies involving liquid receipt AVS tokens, allowing rewards to be compounded and potentially helping delegation managers identify optimal reward payout strategies.
Overall, it remains unclear whether many AVSs will generate substantial revenue in the short term, but in the medium to long term, numerous AVSs are likely to emerge to meet the diverse needs of developers, users, and protocols.
Even if the collective income paid to restakers by these AVSs isn’t significantly higher than native staking rewards, it may still offer superior yields compared to native staking. We expect this will drive widespread adoption of tokens like $rJitoSOL across Solana DeFi—and perhaps one day even surpass classic JitoSol, just as we anticipate LRTs will surpass LSTs in effective utilization on Ethereum.
Finally, as StakeNet evolves, we may see the emergence of the first permissionless autonomous LRT delegation manager—one that dynamically assesses risks across various AVSs, operators, etc., and adjusts LRT delegation strategies in real time.
Thus, Jito continues to position itself as the dominant protocol on Solana across key value capture points—MEV, staking/liquid staking, and now restaking.
We look forward to continuing to monitor the AVSs emerging within the Jito restaking ecosystem and tracking data on restaking deposits, withdrawals, and liquidity.
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