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Jito's MEV Priorities
Miner extractable value (MEV) is an inherent product of any financial market including blockchains. Jito’s founding mission was to minimize negative externalities while enabling validators and stakers to maximize their share of MEV rewards.
Jito Foundation has several overarching priorities for the evolution of MEV on Solana:
- Minimize negative externalities: Solana has experienced network congestion from disorganized MEV trading. Network performance needs to improve so users have a good experience. If not, users may be less active on Solana. Jito-Solana’s auction mechanism is designed to ensure the network's reliability.
- Prevent centralization: MEV tends to encourage centralization over time as there are economies of scale. The best defense against this is transparency, low barriers to entry and healthy competition. In addition to open source tools, Jito will be publishing dashboards and other data to provide transparency into the MEV market.
- Distribute rewards: MEV can be highly profitable in aggregate. The Foundation's work enables transparent distribution of a portion of this revenue across the ecosystem. MEV does not exist without regular users nor a successful validator community. These parties should get some share of profits for the network to maintain a healthy balance.
Censorship resistance is not directly related to MEV extraction but can be indirectly affected by the underlying infrastructure. Jito’s client architecture differs from most other MEV programs. The Jito Block Engine submits specific transactions for inclusion but the submitted bundles will be only a fraction of total transactions within any block. Solana’s design is not compatible with full block proposing as done elsewhere. Jito's deployment should not impact the censorship resistance of Solana.
There are some dilemmas inherent to MEV extraction. Jito Foundation plans to explore the tradeoffs openly with the Solana community in upcoming months. The Foundation will also be engaging with a broad array of stakeholders to gather alternative views.
For now, the Foundation acknowledges MEV will persist in any environment and is working tirelessly to ensure it evolves in the healthiest manner possible.