A new proposal within the Jito ecosystem is set to redefine the tokenomics of $JTO, the platform’s native token.
By reallocating a portion of TipRouter Fees toward a programmatic buy-and-burn mechanism, this initiative seeks to enhance $JTO’s strength, stability, and sustainability. Specifically, 1.5% of TipRouter Fees will be dedicated to systematically purchasing $JTO at regular intervals and removing it from circulation.
Understanding the Buyback Mechanism
Currently, the TipRouter applies a 3% fee on Tips, with only 0.3% being directed to $JTO and JitoSOL Vaults, while the majority—2.7%—flows into the DAO Treasury.
Under the new proposal, 1.5% of the total fee will fund a Dollar Cost Averaging (DCA) Program, ensuring regular purchases of $JTO while mitigating price volatility.
Leveraging Solana’s low transaction costs and Jupiter’s DEX aggregator, this program will efficiently execute buybacks while minimizing slippage and front-running risks.
Analyzing Buyback Potential
To gauge the effectiveness of this proposal, we examined onchain data, particularly the volume of Tips paid over the past 90 days.
Based on Flipside data, during this period, Tips exceeded $392 million, peaking at $17.2 million on January 20. This surge coincided with the launch of the TRUMP token, which temporarily boosted DEX trading activity. However, as the memecoin hype cooled, daily volume occasionally dropped below $1 million.
Given Jito’s 3% fee structure, the proposed allocation of 1.5% to $JTO buybacks translates into substantial figures. The current 7-day moving average for $JTO buybacks stands at $16.5K daily, while the 90-day average is significantly higher at $64.7K per day. Extrapolating these numbers:
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Monthly Buyback Estimate: $1.9 million
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Annual Buyback Estimate: $23.6 million
At current market prices, this would result in over 11 million $JTO tokens being bought and burned annually, effectively reducing $JTO’s total supply of 1 billion tokens by approximately 1.1% per year.
Comparing with Other Buyback Programs
While the $JTO buyback program introduces a deflationary aspect to the token, its scale is relatively modest compared to similar initiatives by other platforms like Jupiter ($JUP) and Raydium ($RAY).
Jupiter ($JUP)
Jupiter dedicates 50% of all revenue to its buyback program, which, according to our previous report, amounts to approximately $437K in daily buybacks—over $13 million per month.
This far exceeds $JTO’s proposed 1.5% allocation, highlighting the substantial difference in buyback volume.
Raydium ($RAY)
Raydium’s buyback share varies depending on pool and swap types, ranging from 3% to 12% of transaction fees.
Even with reduced trading volume, Raydium’s lowest daily buyback still exceeds $135K, significantly outperforming $JTO’s estimated figures. On peak days, such as January 20, Raydium’s buyback volume surged beyond $7.2 million.
Evaluating the Impact
While $JTO’s proposed buyback mechanism is a step in the right direction, it currently lags behind the aggressive deflationary strategies of Jupiter and Raydium. However, this proposal lays the groundwork for future enhancements, allowing for potential adjustments in fee allocation to increase $JTO’s deflationary pressure.
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