MEV is a big business, especially on Solana where MEV is particularly intense and profitable.

Author: Maggie

In the past year, the Memecoin craze has turned Solana into a gold rush for traders. Countless individuals have chased after the volatile Meme coins, trying to seize opportunities with Trading Bots. However, few realize that the truly risk-free and highly profitable business does not pulse on the candlestick charts but is hidden deep within the dark forest of the blockchain. This is MEV (Maximum Extractable Value).

Compared to the publicly visible Bot profits, the earnings from MEV are often concealed within the block construction and ordering mechanisms, typically controlled by the "invisible hand" that holds power and infrastructure on-chain. Many are unaware of this because the operational threshold of this system is high, information is extremely asymmetric, and control is highly concentrated.

While you use Bots to front-run the order book and prevent squeezes, MEV catchers are controlling transaction ordering behind the scenes, accurately capturing arbitrage opportunities; when retail investors compete on speed and strategy, large institutions with staking advantages and node permissions have already secured their place at the top of the profit pyramid through structural advantages.

On Solana, MEV is not just a trading opportunity; it is a power of infrastructure level—it is controlled by a very small number of people, forming a high-threshold, high-monopoly, high-profit capital game. Today, we will unveil the big business of MEV on Solana.

1. First, what is MEV?

MEV stands for miner extractable value, referring to the ability of miners to include, omit, and order transactions when packaging blocks to earn as much additional profit as possible. Due to the Memecoin frenzy and active DeFi, the scale of MEV is enormous.

From a business perspective, MEV typically includes: liquidation, arbitrage, and sandwich attacks.

Liquidation: Liquidating under-collateralized lending positions to earn rewards.

• When a borrower fails to maintain the required collateral ratio in a lending agreement, their position becomes eligible for liquidation. MEV seekers monitor these under-collateralized positions on the blockchain and execute liquidations by repaying part or all of the debt in exchange for a portion of the collateral as a reward.

Arbitrage: Buying and selling simultaneously on different DEXs to profit from price differences.

• The simplest form of arbitrage occurs when two DEXs have different prices for the same trading pair, allowing the arbitrageur to profit from the price difference with a single trade.

Sandwich Attack: Buying before the target transaction and then selling for profit.

• A sandwich attack is an arbitrage strategy in DeFi markets where the attacker profits through three atomic bundled transactions: first, a non-profitable front-running transaction pushes the asset price to the highest level allowed by the victim's slippage, then the victim's transaction is executed at the high price, further pushing up the price, and finally, the attacker sells the asset at an inflated price through a back-running transaction, offsetting the initial cost and securing net profit.

In terms of behavior, we can distinguish between front-running and back-running.

• Front-running: Front-running refers to MEV seekers identifying another trader's buy or sell order in the mempool and placing the same order before that trader, profiting from the price impact of the other transaction.

• Back-running: Back-running is the counterpart to front-running, a specific MEV strategy that exploits temporary price imbalances caused by another transaction, often due to improper routing. Once a user's transaction is executed, the back-running seeker balances the prices across various liquidity pools by trading the same asset, ensuring profit.

Liquidations are all back-running, most arbitrage is also back-running, and sandwich attacks are a combination of front-running and back-running. For specific MEV cases, you can refer to Helius's report, which provides very detailed explanations and examples.

2. How big is the MEV business?

According to some unverified statistics, last year trading bots earned $1.1 billion, pumps earned $500 million, MEV earned $1.5 billion, AMM earned $1 billion, and celebrities like Trump and others earned $500 million, with nearly $5 billion taken out by the over-the-counter market.

On the Solana network, as network activity increases and the 2024 Memecoin craze approaches, MEV earnings on Solana have also surged dramatically. From Helius's report, we see that Jito's arbitrage detection algorithm analyzed all Solana transactions, including those outside of Jito bundles, identifying 90,445,905 successful arbitrage transactions over the past year. The average profit per arbitrage was $1.58, with the highest single arbitrage profit reaching $3.7 million. These arbitrages generated $142.8 million in profits, of which $126.7 million (88.7%) was denominated in SOL.

MEV is a big business!

3. MEV is particularly severe on Solana, with MEV king—Jito

The MEV on Solana is more intense and centralized compared to MEV on ETH, stemming from their underlying chain design differences.

Solana: High performance --> Sacrifices some degree of decentralization --> High centralization --> Power is highly concentrated

Solana is known for its high performance, with a block time of only 400 milliseconds (compared to Ethereum's 12 seconds), but this design sacrifices some decentralization, leading to a high concentration of power.

Since there is no mempool on Solana, other nodes must connect to the current block-producing validator node to obtain block data and submit transactions. This design gives the block-producing validator node immense power and lacks checks and balances, resulting in a severe MEV problem on Solana, with monopolized and high earnings.

In contrast, the MEV market on Ethereum has more market-oriented characteristics. There is high competition between MEV seekers and block builders, which drives down overall MEV earnings.

Jito is the MEV overlord of Solana.

In August 2022, Jito launched the Jito-Solana client. In the initial nine months, due to low network activity, the adoption rate of the Jito-Solana client remained below 10%, and MEV rewards were limited. Starting from the end of 2023, the adoption rate accelerated significantly, reaching 50% by January 2024. By the end of 2024, over 94% of Solana validators (weighted by stake) were using the Jito-Solana client, forming an absolute dominance.

How does Jito operate?

The main difference between the Jito-Solana client and the official client is that it natively supports the MEV extraction mechanism, with the core function of providing Bundles services. Validators running this client effectively join the Jito alliance. This alliance offers a priority execution channel for transactions, where traders submit bundles by paying tips to gain transaction ordering advantages. Therefore, the Jito client significantly enhances the revenue capability of nodes compared to the official client.

Jito Bundles

Jito Bundles allow traders to prioritize the submission and execution of key transactions by bundling trades and paying tips. This is not only applicable to MEV opportunities but is also commonly used for other purposes such as acceleration, batch trading, and preventing sandwich attacks. The core process is as follows:

1. Transaction assembly: Traders discover arbitrage opportunities and quickly construct transactions.

2. Bundle submission: The transactions are packaged into a bundle and sent to Jito nodes, accompanied by tips to enhance sorting priority. These bundles are then relayed to the block-producing Leader by Jito nodes.

3. Priority execution: If a Jito validator becomes the Leader for the current Slot, they will prioritize packaging these transactions into the block and execute them in the front position. The earnings will be distributed to the validators and the Jito protocol according to the mechanism.

Jito's staking mechanism

As mentioned earlier, the more money staked on Jito nodes, the more tips and MEV income they receive. Therefore, Jito nodes need to attract more SOL to stake on them. Consequently, the Jito protocol allows users to stake and share a portion of the node's staking rewards and MEV earnings with these users.

To further increase its node staking volume, Jito launched a staking protocol that allows ordinary users to delegate SOL to Jito nodes and proportionally share block rewards and MEV earnings. Stakers earn profits, nodes increase block production probability, and traders gain priority execution opportunities, forming a complete MEV interest closed loop.

Three key characteristics of MEV: Information advantage, monopoly effect, capital barriers

MEV is an information war, winner takes all

Competing for MEV opportunities on Solana is a matter of millisecond-level speed and sensitivity to on-chain information. Whoever can discover arbitrage opportunities the fastest and accurately place transactions in the same/next Slot will capture the profits. This relies on two points:

• Fast information synchronization capability, usually requiring connection to large Jito node RPC services;

• Rapid transaction on-chain, prioritizing transaction submission through Jito Bundles channels and paying sufficient tips.

Jito's bundle service is a monopolistic service.

The key to MEV lies in "who is the block producer (Leader)." For Jito to provide stable and reliable bundling services for traders, it must cover as many Leader Slots as possible. This requires its client to have a very high coverage in the network to ensure that most rounds are produced by Jito nodes.

Once a critical point is reached, the network effect self-amplifies: the more widespread the adoption, the more stable the service, and the harder it is for competitors to shake it. This is why Jito has quickly consolidated a 94% client share.

Solana's MEV is a capital game

Solana is a PoS chain, and the more staked, the higher the probability of becoming a Leader. Leaders have the power to order blocks, naturally allowing them to earn the most MEV and tips. This creates a highly concentrated capital barrier:

• Large nodes stake more, have higher block production frequency, and synchronize information faster;

• The more sensitive the information, the stronger the arbitrage ability;

• The RPC services of large nodes (even those in the same data center) become increasingly expensive, turning into scarce resources for information access.

Those who can earn MEV often can only do so through the largest capital nodes.

4. MEV Revenue Flow on Solana: Who is Making the Money?

As mentioned earlier, the MEV revenue on Solana is quite substantial. So, where does this revenue ultimately go? It primarily belongs to three core stakeholders: the Jito protocol itself, large high-staking nodes, and block space sales brokers.

Jito Protocol: The Tax Collector of Infrastructure

• In the past year, Jito has processed over 4.3 billion transaction bundles, generating a total of 5.51 million SOL in user-paid tips. At a SOL price of $140, this means that the additional on-chain transaction value guided by Jito's infrastructure is approximately $7.7 billion. The revenue sharing between Jito and validators is around 3-5%, so Jito's actual earnings in the past year were about 200,000 to 270,000 SOL, equivalent to approximately $3.5 million.

High-Staking Nodes: The On-Chain Privileged Class

• Since Solana is a PoS chain, nodes with higher staking amounts have a greater probability of producing blocks. These "top validators" not only continuously earn base block rewards and inflation rewards but also receive a significant amount of transaction tips from Jito Bundles. Normal node earnings are about 6%, and during periods of high network activity, some nodes can achieve annualized returns of over 20%, far exceeding those of ordinary nodes. Their income sources include: inflation rewards, block rewards, Jito tips, and some revenue from selling SWQoS transaction on-chain permissions.

Block Space Sales Brokers: Intermediaries for On-Chain Transactions

These brokers act as secondary sellers of block space. Their operational logic is as follows:

• They establish partnerships with high-staking nodes to purchase SWQoS transaction on-chain permissions at favorable market prices; (Stake-Weighted Quality of Service SWQoS allows leaders to identify and prioritize transactions from staked validators. In cases of network congestion, SWQoS ensures that high-staked validators' transactions are less likely to be delayed or dropped.)

• They bundle multiple users' transactions into Jito Bundles, concentrating tips to achieve higher priority;

• The tips paid by users are significantly higher than the fees brokers pay to validators, allowing brokers to profit from the difference;

• At the same time, they also embed their own arbitrage transactions (such as back-running) within the bundles to further capture MEV profits.

• For example, on DefiLlama, some revenue data for bloXroute can be seen (link), showing that the tips received are quite substantial. However, it should be noted that this data does not cover all of their receiving addresses and does not exclude the shares distributed to validators and order flow providers.

In summary, Solana has exhibited a phenomenon of highly concentrated power, with the vast majority of Jito's MEV earnings captured by the Jito protocol, large validator nodes, and block space sales brokers.

5. The Competitive Landscape of Clients on Solana

Currently, there are over 1,300 validator nodes on Solana, with more than 94% being Jito nodes. The main clients include the following types:

Solana Nodes

• This is the most basic node client, which does not include any MEV optimization mechanisms. Nodes running this client have almost been marginalized due to their earnings being far lower than those running Jito.

Jito Nodes

• The Jito client is built on the official client, adding Jito protocol and Bundles support, allowing nodes to accept bundled transactions and collect tips from them. If users wish to achieve front-running, prevent sandwich attacks, or quickly get on-chain, they can submit transactions to validators through the Jito Bundle service and attach tips to increase execution priority. Since nodes running the Jito client can earn additional tips, currently over 90% of nodes on the mainnet have switched to Jito nodes, making it the default choice.

Paladin Nodes

• Paladin is an improved version based on the Jito client, aimed at providing a fairer transaction prioritization mechanism for on-chain processing, primarily addressing the "sandwich attack" issue present in Jito's bundle sorting (where malicious validators insert sandwich transactions without being penalized). According to community reports, the current adoption rate of the Paladin client is about 15%, and since it is still recognized by the network as a Jito client, it is included in the 94% total statistics.

Firedancer Nodes

• Developed by Jump Crypto, Firedancer is a standalone high-performance Solana client, originally intended to enhance network throughput to facilitate Jump's quantitative trading. The initial version did not support the Jito protocol, thus unable to access tips revenue, resulting in very low adoption on the mainnet. However, as new versions begin to support the Jito protocol, validators using Firedancer can also earn Jito tips. Although currently deployed less on the mainnet, most nodes on the testnet have adopted Firedancer, indicating that it may gain a larger market share on the mainnet in the future. The Solana Foundation has also supported it.

The competitive logic of these node clients:

Jito vs. Paladin: The Fairness Battle

• The Jito protocol has formed a de facto monopoly on MEV extraction due to its high concentration. However, the protocol currently lacks a penalty mechanism for malicious behaviors (such as validator sandwich attacks), leading to situations where users utilizing bundles may still be sandwich attacked. This presents an opportunity for clients like Paladin, which offers a more equitable bidding process for transaction prioritization on-chain. However, since Paladin is essentially a modification of Jito-Solana, if Jito improves its mechanisms in the future, it may suppress Paladin's viability.

Firedancer vs. Other Clients: Performance Replacement

• The greatest advantage of Firedancer is its performance, claiming a TPS of up to 1 million (theoretically 1 million, actual performance is unclear). If the transaction volume on the Solana network continues to grow in the future, high-performance client nodes that meet performance requirements will gain an advantage and squeeze out low-performance clients. Once high-performance nodes start packaging larger blocks, low-performance clients may struggle to keep up with synchronization, affecting validation performance and ultimately being marginalized. Therefore, as we demand higher TPS from Solana, it will naturally drive the entire Solana network towards high-performance client migration.

In summary: The vast majority of nodes on the Solana mainnet run the Jito-Solana client, and the Jito protocol has become part of the infrastructure. As the Firedancer client begins to support the Jito protocol, the mainnet may see iterative upgrades in client performance in the future—from "running Jito to earn more" to "running high-performance Jito to avoid being eliminated."

6. How Large Institutions Step by Step Become Beneficial Manipulators on Solana?

The architecture of Solana naturally leans towards power centralization, providing a favorable environment for large institutions to intervene and dominate the ecosystem. The Solana Foundation, Jito, Multicoin, Jump, Helius, Coinbase, Binance, Jupiter, and others hold significant governance power on Solana. Many institutions are optimistic about Solana's future prospects and hope to become one of the beneficial manipulators on Solana. Taking the recently active Sol Strategies as an example, we can clearly see how large institutions gradually infiltrate to become beneficial manipulators on Solana:

Step 1: Sol Strategies expands market share and ecological dominance by acquiring nodes, becoming one of the major players.

Solana currently has a staking rate of 65.6% (approximately 380 million SOL staked), controlling validator nodes means mastering the network's consensus mechanism and voting rights. Sol Strategies has rapidly acquired top nodes, quickly entering the core of power:

• November 2024: Acquired the validator node operator Cogent Crypto for $18 million (cash + stock) across Solana, Sui, Monad, and ARCH networks, focusing on the SOL network.

• March 2025: Acquired Solana's top validator nodes Laine and Stakewiz.com for 35 million Canadian dollars (cash + equity), increasing the staked SOL amount to 3.3 million (valued at approximately $38.8 million), and recruited Laine's founder Michael Hubbard as Chief Strategy Officer.

Step 2: Attempting to promote the inflation rate adjustment proposal SIMD-228 to further consolidate their power. (This proposal ultimately did not pass)

SOL Strategies strongly advocated for the adjustment of the inflation mechanism through the SIMD-228 proposal, which aimed to introduce a dynamic inflation mechanism to replace the current fixed deflation model. If the proposal passed, Solana's annual inflation rate would drop from a fixed rate of 4.68% to 1% or even 0%. Although the proposal ultimately did not pass, the strategic intent behind it was very clear:

• Stabilizing SOL Value: Reducing inflation can decrease the release of new SOL, alleviate token selling pressure, and enhance long-term returns for stakers;

• Suppressing Small Nodes, Consolidating Large Node Dominance: A reduction in inflation would compress the earnings of all validators, but small nodes have weaker risk resistance and are more likely to be eliminated, facilitating the concentration of the network towards top validators.

Step 3: Manipulating interests on Solana. Promoting the listing of Solana ETFs, institutionalizing crypto assets, and becoming an ETF staking provider.

Sol Strategies Becomes 3iQ Solana Staking ETF Staking Provider and Promotes the Listing of the 3iQ Solana Staking ETF. Attempting to further increase staking volume and compete for blockchain governance dominance.

Summary

1. MEV is a big business. Especially on Solana, MEV is particularly intense and profitable.

2. Protocols like Jito are monopolistic MEV protocols with a strong head effect.

3. Power is highly concentrated on Solana, with MEV revenue primarily captured by the Jito protocol, high-staking nodes, and block space sales brokers.

4. There are various clients on the Solana network now, the Jito-Solana client currently dominates the mainnet, while the Firedancer client supporting the Jito protocol may become a high-performance upgrade in the future.

5. Solana is very suitable for institutional dominance, as SOL Strategies demonstrates how an institution can penetrate Solana comprehensively through node acquisitions, attempts to promote governance proposals, and push for ETF listings, competing for blockchain governance sovereignty.

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