Jito proposes a new block-building mechanism for Solana

Source Cryptopolitan

Jito, one of the key Solana validators, has proposed a new block building system. The goal is to create private pools with optimized block building and no concerns about sandwich attacks. 

Jito is working on a new block building system, tailored to the needs of apps and DeFi protocols. The main goal is to prevent sandwich attacks, by creating a safe block-building venue. Called Block Assembly Marketplace (BAM), Jito said the system would enable secure block building. 

 

Sandwich attacks or front-running transactions are a problem for Solana, affecting DEX activity. A year ago, sandwich attacks were one of the biggest threats for the network. Solana has no mempool, though previously Jito offered access to transaction data. One of the problems is that even private pools may not be secure and inject front-running transactions. 

Jito changes Solana block-building

Solana has a complex legacy system of block building, with no dedicated MEV builders. Jito is one of the main block optimizers, working through auctions for favorable transaction placements. 

There are also services that sponsor the SOL gas fee and offer traders a safe endpoint to avoid sandwich attacks. Traders and users also unleash MEV bots, which compete for front-running transactions. 

Jito will upgrade its auction system and replace it with the Block Assembly Marketplace (BAM). The new approach to transaction processing will include a new layer of hardware nodes, additional validators, and plugins to connect developers. BAM is built for the needs of developers aiming to launch apps with specific transaction-ordering rules.  

One of the key features will be specialized encryption hardware, which will keep transactions encrypted until execution, and will verify all transfers in a trustless way. The encrypted transactions will also lift the accusations that some pools and relayers, including Jito, are exposing the data to malicious actors and MEV bots. 

BAM will allow developers to create products that can hide transactions, cancel them, or change them until the very last moment. 

The new approach to block building can optimize Solana-based perpetual swaps similar to Hyperliquid. Other use cases include dark pools for trading, or on-chain games with limited frontrunning. 

Jito to start BAM as a centralized service

Jito Labs will start the BAM service with centralized control, creating the Ecosystem Advisory Committee. Initially, the service will recruit validators, as well as the Solana Foundation. 

Jito Labs will also run the first BAM nodes until gaining assurance that the network is stabilized. Later, third-party shortlisted validators will join. Those include Triton One, SOL Strategies, Figment, Helius, and others aligned with the Solana idea. 

The BAM program will also recruit an initial cohort of applications to test the plugins and the new approach to offering encrypted transactions, verifiable by dedicated Nodes and Validators. 

Even before the BAM proposal, Solana reported fewer MEV attacks. Despite this, Jito is still the main transaction relayer, with $1.34M in daily fees generated. Launching BAM may spread the revenues from block-building between nodes, validators, and even app developers. 

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