- Jito tokenholders are voting to establish a new subDAO to support the JTO governance token.
- The proposal gives the subDAO $7.5 million in JitoSOL and 5 million JTO tokens for buybacks and incentives.
- The new Cryptoeconomics subDAO will be managed by six DeFi experts, including Jito’s head of governance.
- Jito is the second largest DeFi protocol on Solana, with nearly $3 billion in user deposits.
- Experts question whether token buybacks will help the JTO token price, as research shows mixed effects.
Jito, a decentralized finance (DeFi) protocol running on the Solana Blockchain, is in the process of creating a new subDAO to help increase the value of its JTO governance token. On Friday, tokenholders began voting on the proposal, which aims to boost the protocol’s growth and support the JTO token price.
The proposed Cryptoeconomics subDAO will be led by a group of six DeFi experts. According to the official forum post, it will receive $7.5 million in JitoSOL—a liquid staking token—and 5 million JTO tokens. The group will use these assets for strategies like token buybacks, yield subsidies, and a new fee switch vault.
The proposal, written by Nick Almond, Jito’s head of governance, states the subDAO will have broad authority to experiment with various approaches using funds from the Jito DAO treasury. “The subDAO seeks a broad mandate to facilitate the exploration and execution of a range of possible mechanisms and approaches, and to test them out in the market by using DAO funds,” the proposal said. The vote has already reached quorum, with 12.7 million votes in favor and just five votes against.
Jito launched its governance token, JTO, in late 2023. The token reached a high of $6.01 but has since dropped by 67%, despite Jito holding almost $3 billion in deposits and generating around $30 million in yearly revenue. The proposal notes much of this income is currently unused, calling the creation of the subDAO an urgent step.
Similar strategies have been used by other DeFi platforms. For example, Hyperliquid spent over $1 billion on buybacks for its HYPE token, which rose 647% during that period. However, the effectiveness of buybacks is debated. Research by Messari found no clear evidence that buybacks improve token prices, noting that “token performance remains driven by metrics growth and narrative formation,” according to report author Sunny Shi.
Voting on the Cryptoeconomics subDAO proposal will end on Tuesday. More information about the proposal is available on the Jito governance forum, and voting results can be followed on the Realms platform.
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