Jito Labs, a startup company for the Solana MEV blockchain, announced on Friday it would suspend the mempool feature offered by Jito Block Engine due to an increase in the number of attacks using sandwich techniques on the Solana Blockchain.
MEV Sandwich Attacks occur when MEV Searchers take advantage of the asset’s volatility. Searchers profit from an asset’s volatility by buying ahead of large orders that will increase its price. They then immediately sell the asset after the victim buys, taking advantage of the swap.
Jito Labs made the decision to stop after “deliberate conversations with the Jito Labs team and key Solana ecosystem stakeholders.” Participants in the industry have had mixed reactions.
On Ethereum, validators create blocks by collecting transactions from a mempool — a staging area before a block is constructed and confirmed on-chain. Validators earn extra revenue based on the order of the transactions in the block. This is called maximum extractable values, or MEV, and it often comes at the expense to retail traders.
Solana’s block processor, however, is already known in advance. Jito Labs, a startup that created mempool functionality to enable validators on Solana to capture MEV.
Blockworks’ research analyst Dan Smith pointed out in a recent post to X that MEV has been the most popular vehicle for many years. “entire growth story for JTO,” By suspending the mempool function, JTO token owners may struggle to get value.
Jito’s native token JTO is a means for the members of a community to be involved in governance.
CoinGecko shows that JTO currently trades at $2.72, a drop of 1.6% from the previous week.
“One party that this decision potentially benefits is Telegram bot users, who frequently set a high slippage amount to get their swap through but then experience the maximum slippage due to them getting sandwiched,” Ren Yu Kong is a Blockworks researcher and analyst. “With the removal of Jito’s mempool, this is much less likely to occur.”
Kong, however, notes that Jito’s mpool is likely to encourage searchers and arbitragers to spam the system, leading to failed transactions and wasting validator resources.
“With better execution, users get worse transaction inclusion guarantees as searchers and participants are once again incentivized to spam transactions for the maximum probability of fastest transaction inclusion,” Kong says
Jito failed to respond before the publication date of Blockworks’ request for comment.
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