Jito’s BAM upgrade set to make Solana apps richer
Solana apps and app tokens could be in for a ‘mass repricing’
phochi/Shutterstock and Adobe modified by Blockworks
This is a segment from the Lightspeed newsletter. To read full editions, subscribe.
It’s been a week and a half since Jito announced BAM (Block Assembly Marketplace), Solana’s most significant transaction processing upgrade ever.
In my view, much of the public messaging surrounding the upgrade has focused on BAM’s privacy-preserving use of TEEs and ability to give apps better control over transaction execution. What hasn’t been covered quite as much, which both of my guests on the Lightspeed podcast spoke about this week, is how BAM plans to create additional revenue for Solana apps.
BAM plugins are programmable interfaces that apps can use to control how transactions are sequenced. One potential example could be taker speed bumps, a spread-tightening mechanism that the perps DEX Hyperliquid has deployed to great effect.
These plugins will also come with some “TBD fee model,” Jito Labs CEO Lucas Bruder told me, meaning applications can start generating revenue from the sequencing of transactions through BAM. This value is currently being captured by takers or arbitrageurs in the market, Bruder added.
If BAM works as advertised, plugins could provide applications with a hefty payday.
“What I think we’ll see is applications earning multiples more than validators and stakers,” Blockworks Research Analyst Carlos Gonzalez Campo said.
While Crypto Twitter will probably be none too happy to see more revenue flowing to the likes of pump.fun, keeping applications happy is important if Solana wants to be the internet’s financial ledger. One of Ethereum’s most successful apps in Uniswap recently created its own layer-2 chain in Unichain, thereby internalizing more value relative to its home chain. And without changes to how value is shared, Solana’s popular apps may someday find it prudent to do the same.
Bruder hopes Solana apps will send this new revenue source back to their native tokens.
“Hopefully [apps] share those fees with the token holders and we’ll see a mass repricing of Solana DeFi,” Bruder said.
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- 0xResearch: Alpha in your inbox. Think like an analyst.
