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Jito, a Solana-based liquid staking protocol, kicked off a highly anticipated airdrop event that distributed 90 million JTO governance tokens to users.
Valued at approximately $165 million at the time, Jito Airdrop (JTO) rewards users for staking and lending the protocol's liquid SOL token, JitoSOL.
Analysts speculate The wealth effect could provide a stimulus for broader adoption of Solana.
Jito allows users to stake Solana in exchange for JitoSOL, a liquid token that can be freely traded or used as collateral in defi protocols.
Along with its competitor Marinade, Jito constitutes one of Solana's largest liquid staking platforms, each with around $425 million in total value locked (TVL), according to data from DefiLlama. For context, dominant liquid staking protocol Lido has amassed a TVL of $21.45 billion in ethereum (eth).
The airdropped JTO token will govern the newly formed Jito DAO and manage its significant $490 million treasury. Token allocation was based on a points system linked to JitoSOL balances and lending activity. According to Dan Smith of Blockworks Research, quoted in a recent articlemoving just $40 of JitoSOL could have earned users up to $10,000 in JTO.
The move mirrors other high-profile airdrops, such as the drop of Uniswap's UNI token worth $900 million in 2020. Nicknamed According to a “stimulus check” by analyst Ryan Watkins, the UNI wealth effect may have boosted the development of DeFi. Similarly, some believe the Jito airdrop could reinvigorate interest in Solana as it recovers from the FTX fallout.
There are signs of renewal throughout the Solana ecosystem. Its nft volume is improving and DEXs like Solanart and Raydium processed a record $7.3 billion in volume last month. Meanwhile, new projects like the Jupiter Protocol plan additional token distributions to further incentivize growth.
Airdrop recipients have an 18-month claim window, possibly allowing them to defer taxes until 2024, according to Blockworks' Ryan West. Despite this, more than half of the supply was claimed just hours after its distribution. Additionally, major token holders appear to be maintaining their holdings, showing confidence in the future of Jito.
With Solana recovering and activity heating up across all operations, nft-marketplace-tensor” target=”_blank” rel=”noopener”>NFTsand DeFi, the JTO airdrop could provide an additional boost to Solana. The wealth effect can spur broader adoption and development, much like Uniswap's UNI token did for DeFi. As such, the event marks an important milestone in Jito and Solana's path to widespread use.
