Woofun AI reports that Jito has introduced JIP-38, a governance proposal mandating the automated buyback and burn of JTO tokens using revenue from its new trading platform, JTX. Authored by Mah and published by Foresight News, this initiative marks a strategic shift for the SOL-based ecosystem infrastructure protocol, aiming to enforce transparent value capture for holders amidst declining market conditions.

The mechanics of JIP-38 are precise and time-bound. Submitted on July 13, 2026, the proposal dictates that 80% of the total revenue generated by JTX—specifically the platform fees charged to users—will be directed toward open-market purchases of JTO tokens, which will then be permanently burned. This automated value accrual mechanism is committed to running from the launch of JTX until at least the fourth quarter of 2027, establishing a rigid framework for economic benefit distribution within the DAO structure.

The urgency of this proposal is underscored by the severe depreciation of the JTO token. The asset previously reached a historical high of $5.3 but plummeted to a low of $0.21 in February this year, representing a decline of over 96%. Although JTO has since recovered to $0.63, with a recent peak of $0.8853, the token remains far below its previous valuation, highlighting the need for structural support mechanisms to stabilize holder confidence.

JTX represents Jito’s expansion into the application layer, leveraging its existing strengths in MEV (Maximum Extractable Value) infrastructure and liquid staking on Solana. The platform’s core product suite includes JitoSOL, a liquid staking token; Block Engine; and the Block Assembly Marketplace (BAM). These tools enable validators and stakers to capture MEV more efficiently while enhancing block construction services for the Solana network. JTX itself is a self-custody trading platform that initially supports spot and equity assets, with perpetual contracts scheduled for launch later this year, offering early users priority access, permanent usernames, and referral rewards.

This move addresses a longstanding debate in the crypto industry regarding "value ownership." Historically, many projects have seen revenues flow to development teams or affiliated entities, leaving token holders with governance rights but no direct economic benefits. Through JIP-38, Jito asserts that main network revenues should accrue to the DAO, with usage determined by JTO token holders via enforceable governance rules. This positions the network as token-centric, ensuring that economic benefits are directly tied to token holding rather than mere participation in governance.

Woofun AI data shows that revenue allocation under JIP-38 is strictly defined. While 20% of JTX platform fees are retained for the platform’s own reinvestment and development, the remaining major network revenues—including those from JitoSOL, BAM income, Block Engine revenue, and the 80% share of JTX fees—are directed to the DAO. Decisions on whether these funds are used for value accumulation (buybacks, burns) or growth investments (subsidies, incentives) must be made through voting by token holders via the JIP process.

Notably, the BAM subsidy program will continue until its hard deadline in Q3 2026, as specified in previous JIP-37, after which it will revert to normal DAO governance.

Execution of the buyback mechanism relies on the Rev Splitter, which collects JTX platform fees and handles automated purchases. This process is managed by the Dev Council under a framework of revocable approval, with plans to gradually increase automation and decentralization. The Dev Council is required to submit reports to the DAO after each epoch, detailing fee collection, the amount of JTO purchased and burned, and relevant on-chain metrics. In the fourth quarter of 2027, analysis firms will submit comprehensive reports on fee flows, allowing token holders to decide on future revenue allocation strategies, whether full buyback, mixed investments, or distributed distribution.

The proposal emerges against a backdrop of intensifying competition in the Solana LST market. Data from the JitoSOL website shows that pledged SOL decreased from 18 million in June 2025 to less than 10 million. This erosion of market share is driven by competitors such as Sanctum, with its multi-token approach, and Jupiter (JupSOL), which employs a zero-fee model.

Additionally, numerous restaking yield mechanisms within the ecosystem have further diluted Jito’s dominance, causing its traditional staking management fees to dwindle.

Tokenomics pressure exacerbates these challenges. Currently, the maximum monthly token unlock amounts to 1.15% of the total supply, equating to 11.31 million tokens worth over $7.3 million. During bear markets, this continuous selling pressure becomes a primary driver of price declines. By implementing automated buybacks and permanent burns, Jito aims to reduce circulating supply and provide sustained support, provided JTX’s trading volume and fee revenue meet expectations.

However, the strategy carries inherent dependency risks. The scale of buybacks is directly tied to JTX’s actual revenues, and as a new entrant, JTX must compete fiercely with established DEXs and trading platforms on Solana. If the platform fails to generate sufficient fees, the promised value capture will be limited. This marks a critical test for Jito’s ability to transition from infrastructure provider to a competitive trading entity, with the success of JIP-38 hinging on the platform’s market adoption and revenue generation capabilities.