Multicoin estimates a 3x for Jito’s token
With a friendlier regulatory outlook and the airdrop flow being stemmed, some are looking to how new native tokens can become valuable assets
Akif CUBUK/Shutterstock modified by Blockworks
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In 2023 and 2024, a number of Solana startups generated native tokens to reward users and let investors and early contributors book returns.
Much of the attention surrounding these tokens went to how lucrative they were for recipients of so-called airdrops — and actual utility took a backseat, especially with a US regulatory regime eager to classify tokens as securities. Now with a friendlier regulatory outlook and the airdrop flow being stemmed, some are looking to how these new native tokens can become valuable assets.
One such example is early Solana investor Multicoin Capital, which recently published an asset report for JTO, the native token of its portfolio company Jito. Multicoin’s forward-looking base case priced JTO at $6.80, roughly three times its current price. I had the report’s author, Multicoin investment partner Shayon Sengupta, as a guest on the Lightspeed podcast this week to discuss his valuation further.
“If you assume Solana REV is going to increase and you assume that demand for priority blockspace is going to increase, Jito is going to be the direct beneficiary of that,” Sengupta said.
That’s likely true. 93% of the Solana network’s stake runs on the Jito-Solana client, which offers off-chain blockspace auctions that maximize economic returns for validators and makes it easier for users to land transactions. Jito tips from these auctions made up around 56% of Solana’s total REV in February. That’s not to mention Jito offering Solana’s largest LST in JitoSOL — a product it seems to be angling to have included in Solana staking ETFs.
What I’m less convinced of is the concept that Jito’s success as a company will trickle down to the JTO token. JTO’s price-to-earnings ratio swung wildly this year when Jito’s revenue greatly increased and its token price stayed roughly the same. That’s probably because there is currently no direct connection between Jito revenue and the JTO token.
The Jito Foundation — which oversees Jito’s stake pool as well as JTO — takes in revenue, but if the foundation were to do things like distribute its revenue to token holders, JTO might start to look uncomfortably like a security. That’s likely part of why the Uniswap Foundation is still yet to distribute fee revenue to UNI holders. Sengupta hinted to me that this may change.
“Our general framing is that as capital markets mature, you end up in a stage where revenues are going to matter,” Sengupta said, vaguely citing “changing policy dynamics” as one potential reason why.
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