TL;DRJito Restaking combines the best parts of EigenLayer & Symbiotic, with some novel improvements of their own
While it has long been rumored that Jito was working on a restaking platform, its clear that they have been putting plenty of thoughtful, intentional effort into the design.
The vault program, much like Symbiotic, will allow for custom delegation strategies across multiple operators, thus diversifying operator risk, while also allowing for increased exposure to a diverse set of AVS.
However, one big difference here is that instead of outsourcing LRT creation and leaking value to exogenous protocols, Jito will have an LRT module, allowing others to create and operate LRTs through the Jito protocol itself.
This is an important difference that Jito has implemented, allowing for further vertical value capture, and creating yet another potential revenue stream for the protocol through a small, reasonable take rate (tbd).
One other interesting differentiator that Jito has mentioned is allowing for the creation of liquid staked AVS tokens that can then be productively used in DeFi.
There are still many questions yet to be answered around how restaking reward tokens will be paid out to end users restaking, whether through native restaking, or an LRT, but this is the first example, to our knowledge, or someone proposing the idea of allowing the minting of a liquid receipt token for an AVS.
Allowing these AVS tokens to be minted liquid reciept tokens could help with bolstering AVS security, and also the productive use of these tokens across DeFi.
This may allow for some novel restaking strategies involving liquid receipt AVS tokens, allowing rewards to compound, and perhaps aiding in delegation managers finding the optimal strategy for paying out rewards to end users.
Overall, it is not clear that many AVS will generate substantial revenue in the short run, but it is very likely that over the medium-long term many AVS will emerge to serve distinct needs for developers, users, and protocols alike.
The collective revenue of these AVS paid out to restakers, even if its not several orders of magnitude larger than the native stake rate rewards, will likely still provide a superior yield to native stake rewards, which we anticipate will fuel tokens like $rJitoSOL to find ample adoption through Solana DeFi, perhaps even flipping canonical JitoSol one day, just as we expect LRTs to flip LSTs with regards to productive utilization on Ethereum.
Lastly, as StakeNet continues to evolve, we could potentially see the first permissionless, autonomous LRT delegation strategy manager emerge. This could possibly assess real time risk across various AVS, operators, etc, and adjust the LRT delegation strategy accordingly.
Therefore, Jito continues to position themselves as the dominant protocol on Solana with regards to critical points of value capture with MEV, Staking/Liquid Staking, and now Restaking.
We are looking forward to continuing monitoring of what AVS materialize on Jito’s restaking ecosystem and tracking restaking deposit, withdrawal, and liquidity data.
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