Understanding Liquid Staking on Solana
What Is Liquid Staking?
When you stake SOL the traditional way, your tokens become locked in a validator for a predetermined period. That lock-up means you can’t trade, lend, or use your staked SOL in DeFi while it’s working for network security. You do earn staking rewards, but you sacrifice flexibility.
Liquid staking changes that. You delegate your SOL to a liquid staking protocol, and in return, you receive a tokenized representation—often called a Liquid Staking Token (LST). On Solana, if you stake with Jito, you receive JitoSOL. That token tracks the value of your staked SOL plus the staking rewards it earns, and you can sell or use JitoSOL in other DeFi activities without waiting for an unstaking cooldown. In other words, liquid staking gives you the best of both worlds: staking yields plus ongoing liquidity.
The Rise of Liquid Staking on Solana
Over the past two years, Solana’s liquid staking market has exploded. By December 2024, the combined market capitalization of all Solana LSTs hit roughly eight billion dollars. Yet liquid staking still represents a small slice of total staking activity—only about six percent of Solana’s staked SOL is in LST form, even though nearly 60 percent of SOL is staked network-wide. That disparity shows there’s plenty of untapped capital waiting for a way to stay liquid while earning rewards.
Among all liquid staking options on Solana, JitoSOL commands the lion’s share—just over forty-percent of the market. Other options like Marinade’s mSOL and Jupiter’s jupSOL are significant too, but Jito has secured a leading spot by marrying MEV-based rewards to its staking approach. This momentum reflects growing interest from yield-hungry SOL holders who want to participate in DeFi without sacrificing their staking returns.
Introducing Jito: A Leading Liquid Staking Platform
What Is Jito?
Jito is a decentralized liquid staking protocol built specifically for Solana. When you stake SOL through Jito, you hand over your SOL to the Jito stake pool and receive JitoSOL tokens in return. Each JitoSOL is fully collateralized by one staked SOL plus the yield it earns—both from standard staking rewards and from MEV opportunities. As time passes, your JitoSOL increases in value compared to SOL because it accumulates both reward streams.
Under the hood, Jito runs a system called StakeNet. StakeNet uses a decentralized approach to select and manage validators with an emphasis on MEV-enabled clients. Validators in Jito’s pool must meet criteria such as running specialized software that captures MEV opportunities, maintaining a low commission rate, and consistently voting on blocks. By combining these validators into StakeNet, Jito aims to deliver strong, transparent, and secure reward generation.
Jito’s Market Position
Thanks to its MEV-enhanced strategy, Jito has quickly become a major force in Solana’s liquid staking landscape. It oversees over six million SOL in its stake pool, spread across more than 160 carefully vetted validators. JitoSOL’s success rests on two pillars: generating above-average yield by tapping into MEV rewards and offering a secure, decentralized stake pool structure through StakeNet.
Compared to other protocols—like Marinade Finance or Jupiter—Jito stands out as the first MEV-boosted LST on Solana. While Marinade’s focus has been on offering a protected staking experience and Jupiter leverages deep DEX integration, Jito has made MEV extraction a core part of its value proposition. As a result, many SOL holders view Jito as an appealing way to earn higher-than-average staking rewards without losing the freedom to use their tokens in DeFi.
Yield Potential with Jito
How Jito Maximizes Yields
At its core, Jito’s yield advantage comes from MEV—Maximal Extractable Value. MEV opportunities arise when block producers can reorder, include, or exclude transactions to capture value (for example, arbitrage or liquidation trades). Jito ensures that validators in its StakeNet run a specialized MEV-enabled client. That setup lets the protocol share MEV earnings with stakers on top of the usual staking rewards.
When you stake SOL through Jito, your tokens get delegated to StakeNet validators. As those validators process blocks, they capture MEV opportunities. All of those MEV proceeds are added to the Jito pool and distributed proportionally to JitoSOL holders. Over time, the dual streams—base staking yield plus MEV rewards—help JitoSOL appreciate relative to SOL more quickly than if you simply staked directly.
Current APY and Fees
As of late May 2025, Jito’s combined annual percentage yield sits around 7.48 percent. That is a competitive rate, particularly when you consider the extra MEV kick that’s baked into the APY. For context, native staking yields on Solana typically range between 6 to 7 percent, and some other liquid staking protocols hover in similar ranges without MEV.
Jito does charge fees to fund its development and cover validator commissions. Here’s how it breaks down:
- Management Fee on Rewards: Jito takes a 4 percent cut of total staking and MEV rewards. In practice, that means if your gross return is 7.80 percent, you keep 96 percent of that and Jito takes the rest.
- Unstaking Fee: If you choose to directly unstake JitoSOL on the Jito platform, you’ll pay a 0.1 percent fee on the transaction. Some users avoid this by swapping JitoSOL for SOL on a decentralized exchange instead, although that can introduce its own costs in the form of slippage.
When you weigh Jito’s 7.48 percent net APY against the fees, the bottom-line yield remains appealing—especially if you factor in that MEV component that many other liquid staking options don’t offer.
Risks Associated with Jito Liquid Staking
Smart Contract Risk
Jito is a decentralized protocol, which means it’s governed by smart contracts. These contracts control how your SOL is staked, how rewards are distributed, and how JitoSOL functions. If a vulnerability or bug is found in the smart contract code, it could be exploited—potentially leading to loss of funds. While Jito’s contracts have undergone independent audits and continuous monitoring, there’s no such thing as zero risk in DeFi. You should always assume that smart contracts, however secure they may appear, carry inherent risk.
Validator Risk and MEV Dependence
Because Jito’s performance depends on its StakeNet validator set, any issue that affects validators—such as poor uptime, slashing incidents, or failures to capture MEV—can affect yields. MEV is also inherently variable and competitive. If fewer MEV opportunities exist or if validators underperform, JitoSOL’s edge over other LSTs could diminish. Furthermore, Jito’s strict validator requirements mean the pool of acceptable participants is smaller, which could introduce some centralization risk over time.
Liquidity Risk and Price Volatility
JitoSOL is intended to track the value of staked SOL plus rewards, but it still trades on open markets. That means its price can fluctuate based on demand, liquidity, and sentiment. If there’s low liquidity or a sudden spike in selling pressure, you may end up exiting your position at a discount. For those who plan to use JitoSOL as collateral or in DeFi, this price volatility could introduce additional liquidation risks or opportunity loss.
How to Stake with Jito
Step-by-Step Process
Staking SOL with Jito is a simple and seamless process that integrates directly with your Solana wallet. Here’s how to get started:
- Connect Wallet: Use a Solana-compatible wallet like Phantom, Solflare, or Backpack. Visit the Jito staking interface and connect your wallet.
- Select Amount: Choose the amount of SOL you want to stake. Ensure you keep some SOL in your wallet to pay for transaction fees.
- Stake and Confirm: Confirm the transaction. Your SOL will be staked into the Jito pool, and you’ll receive JitoSOL in return.
- Track Rewards: Your JitoSOL increases in value over time as staking and MEV rewards accrue. You don’t need to claim them—they’re built into the token’s value.
Using JitoSOL in DeFi
JitoSOL can be deployed across multiple Solana DeFi platforms. You can use it as collateral on lending platforms like MarginFi or Kamino, provide it as liquidity in JitoSOL/SOL pairs on DEXes like Orca and Raydium, or swap it back to SOL directly if you need liquidity.
Its broad integration makes it one of the most composable LSTs on Solana, which further enhances its appeal. But keep in mind: the broader your DeFi exposure, the more careful you must be about managing smart contract and market risks.
User Experiences and Community Feedback
The Solana community has generally embraced Jito with enthusiasm. Early adopters praise the ease of staking, consistent APY, and integration across Solana’s DeFi landscape. Users like that they don’t need to worry about complex validator selection or MEV—Jito handles that behind the scenes.
However, community members do highlight a few concerns. Some have noted temporary depegs between JitoSOL and SOL during volatile market conditions. Others remain cautious about the long-term sustainability of MEV-based rewards and the potential impact of validator centralization.
On platforms like X (formerly Twitter) and Discord, power users tend to view Jito as a serious tool for optimizing yield without giving up access to DeFi strategies. The ongoing development by Jito Labs and its recent airdrop have helped grow user trust and adoption. But as always, transparency and consistent performance remain key to maintaining community confidence.
Jito: Yield or Risk for SOL Holders?
JitoSOL is more than just a staking token—it’s a dynamic tool for Solana holders who want to maximize yield without sacrificing flexibility. With one of the highest APYs in the LST space thanks to MEV integration, Jito stands out as a leading choice for yield seekers. It’s easy to use, widely adopted across DeFi protocols, and backed by a transparent validator network.
But with higher yield comes higher complexity. MEV-based returns are not guaranteed, and smart contract risk is always present in decentralized protocols. Jito’s dominance also puts more weight on its validators and infrastructure, raising questions about long-term decentralization and resilience.
If you’re a SOL holder with a medium to high risk appetite and a desire to stay active in DeFi while earning above-average rewards, Jito might be the staking solution for you. If you value simplicity and security above all else, you may want to stick with native staking. Either way, JitoSOL is shaping the future of yield generation on Solana—and understanding its mechanics can help you make smarter choices in your staking journey.
