Jito's successful JTO token launch is lifting many ships in the Solana (SOL) ecosystem, including that of a direct competitor: Marinade.
Marinade, which like Jito issues a liquid staking token (LST) for SOL investors, saw its governance token reach all-time highs this week. The brisk rally – MNDE doubled to $0.50 in a matter of hours – came as Jito's own JTO token launched and rallied, too.
Marinade now has a fully diluted valuation of $500 million compared to Jito's valuation of $3.5 billion. This is in spite of Jito being a smaller business: Its total value locked (a measurement of the size of a crypto project) is $460 million, whereas Marinade has a TVL of $737 million.
The seeming contradiction caused consternation in Marinade's community Discord server, where some investors speculated on why MNDE fell behind JTO. Both assets are governance tokens whose holders have sway over decisions like the fee rates and treasury of their respective LST protocols.
"Jito has the added benefit of its block building engine and MEV infrastructure," said Barrett Williams, founder of Solana-based futures trading venue Cypher, explaining why investors put a premium on the smaller protocol.
Still, the Thursday airdrop of JTO indirectly spread wealth to MNDE holders, too, by prompting the entire market to reevaluate how it was pricing the Marinade protocol, said Ally Zach, a research analyst for Messari.
"Investors were probably speculating that they will be valued similarly over time," she said in a Telegram message.
The psychology of free money airdrop also might have been a factor. Jito distributed at least 4,900 JTO tokens to around 10,000 wallets apiece, "which left a lot of people on the sidelines," she said. The token's post-launch surge put a spotlight on this corner of Solana, and then "a lot of these sideliners probably came in and started buying."
Marinade and Jito have both drawn comparisons to Lido (LDO), the best-known and, by far, the largest LST protocol in crypto. Lido has commanded most LST activity on Ethereum (ETH) but struggled to replicate that success on Solana. In mid-October, right at the start of the recent Solana rally, it quit the ecosystem. This left a wider opening for Marinade and Jito, both of which started on and stuck with Solana.
The repricing and market mechanics may also have to do with liquidity – or lack of it, said InfraRAY, head of partnerships for Solana-based DEX Raydium. There's only so many JTO tokens in circulation after Thursday's airdrop. Even though 95% of the current distribution has been claimed – and is therefore circulating – it's still only a fraction of the JTO's total supply. Fewer tokens floating around means fewer available to buy or sell.
"Sometimes markets aren’t as efficient as they are made out to be," he said in a Telegram message.