TL;DR

Jito has proposed a tokenomics model that includes token buybacks and fee redistribution to strengthen the ecosystem and increase JTO’s value.
New mechanisms like “Buyback and Barter” and “Real Yield Gauges” are introduced to optimize incentives for token holders.
While not yet official, the proposal has sparked significant debate within the JitoDAO community. 

Jito’s tokenomics proposal has generated significant interest within the crypto community. With the rapid growth of Solana, Jito DAO is looking to leverage the revenue generated by its protocol to strengthen the ecosystem and benefit JTO holders. Andrew Thurman, a collaborator with the Jito Foundation, outlines in a 12-page document that these earnings should not only be accumulated but strategically reinvested to foster long-term ecosystem growth.

Although this proposal is not official and does not represent the Jito Foundation or JitoDAO, it has ignited a substantial debate about the future of JTO as both a governance and utility token. In an increasingly competitive crypto landscape, Jito DAO must find ways to ensure its expansion while providing clear incentives to JTO holders. Thurman’s approach aims to maximize JTO’s value and utility without overlooking the needs of investors and the project’s long-term sustainability.

Buyback and Fee Redistribution Strategies: The Core of the Proposed Model

Thurman’s model is built around two key concepts: “value recycling,” which involves reinvesting the protocol’s earnings to drive ecosystem growth, and “value rewards,” which refers to redistributing fees to token holders. Jito could adopt a hybrid approach, balancing both strategies for sustained growth over time.

One of the most prominent strategies is the token buyback mechanism, similar to those used by protocols like MakerDAO and Raydium. This approach aims to reduce the circulating supply of tokens, potentially increasing their value. Additionally, Jito could implement an income distribution model similar to Uniswap’s, in which the protocol’s profits are shared directly with token holders.

Innovations: Buyback & Barter and Real Yield Gauges 

Thurman also introduces innovative approaches such as “Buyback and Barter,” which would allow Jito to exchange revenue for tokens from partnered projects instead of simply buying back JTO. This would strengthen relationships with other projects, but it also comes with risks if the partnered projects fail.

He also proposes “Real Yield Gauges,” which would allow JTO holders to play an active role in protocol governance by voting on how the protocol’s fees should be reinvested. This model would not only enhance governance but also provide long-term incentives for participants.

The future of Jito will depend on how the community and DAO choose to adopt these proposals to ensure its sustainability.

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Filed under: News - @ March 7, 2025 2:28 pm