According to Blockworks, Solana MEV startup Jito Labs announced on Friday that it will suspend mempool functionality offered by the Jito Block Engine due to an increased amount of sandwich attacks on the Solana blockchain. MEV sandwich attacks occur when MEV searchers profit from an asset’s price volatility. The searcher jumps ahead of a large purchase order that they know will raise the asset’s price and then sells it immediately following a victim’s purchase, profiting from the user’s swap. Jito Labs’ decision to pause was made after deliberate conversations with the Jito Labs team and key Solana ecosystem stakeholders.
The move was met with mixed responses from industry participants. On Ethereum, validators create blocks by collecting transactions from a mempool, a staging area before a block is constructed and confirmed on-chain. Validators can earn additional revenue, referred to as maximum extractable value (MEV), often at the expense of retail traders, based on how these transactions are ordered in the block. Mempools are built into Ethereum by design, but this is not the case for Solana, where the block processor is known ahead of time. To allow validators to capture MEV on Solana, startups like Jito Labs created infrastructure to introduce mempool functionalities.
Blockworks research analyst Dan Smith noted that MEV had been the entire growth story for JTO, implying that by suspending mempool functionality, it could struggle to drive value to JTO token holders. Jito’s native token (JTO) serves two main functions: community members participating in governance and holders earning MEV rewards. These rewards are earned through MEV generated and redistributed by the Jito protocol. According to CoinGecko, JTO is trading at $2.72 at the time of this writing, down 1.6% over the past week.
Blockworks research analyst Ren Yu Kong said that one party potentially benefiting from this decision 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. With the removal of Jito’s mempool, this is much less likely to occur. However, Kong notes that without Jito’s mempool, searchers and arbitragers are likely to be incentivized to spam the network, resulting in failed transactions and wasted validator resources. Jito did not respond to Blockworks request for comment before publish time.
