Author: Techub Hot News Express
By Tia, Techub News
Solana's annual Breakpoint conference often serves as a launchpad for promising new projects. This year, the spotlight is on Toby, a liquid staking protocol. The team unveiled its governance token, TOBY, with a clear value proposition: channeling the extra profits validators earn from MEV directly to tobySOL stakers. This means stakers can earn not just the base chain inflation reward (~7%), but also a share of the revenue from arbitrage, liquidations, and tips generated by block ordering.
This approach is noteworthy because Jito has dominated Solana's MEV landscape for the past two years. Its client commands over 94% market share, and in 2024 alone, its Bundle auction revenue reached roughly $350 million—with searcher tips and net arbitrage profits making up over 90% of that. Since auction proceeds are settled directly between validators and searchers, ordinary stakers only receive the fixed inflation rate, regardless of overall MEV volume. Other solutions have focused on client optimization: Paladin adds a fairness patch to Jito's code to reduce sandwich attacks, while Jump Crypto's C++-based Firedancer aims to triple TPS while maintaining Jito compatibility. Although these improve performance, they don't change the core two-party revenue model. Meanwhile, private mempools run by validators like DeezNode extract millions monthly through dark-pool order flow and sandwiching, further reducing transparency in public auctions.
OpenMEV: How Toby Channels Profits to tobySOL in Three Steps
Instead of building another client, Toby aims to productize the entire "order flow → auction → settlement" stack and funnel upstream profits to its liquid staking token (LST). Its core protocol, OpenMEV, is middleware embedded directly into validator nodes, creating a parallel Bundle marketplace alongside Jito. The process involves three key steps: collection, auction, and distribution.
First, OpenMEV signs exclusive routing agreements with desktop wallet plugins, Telegram trading bots, NFT market-making APIs, and Jupiter's privacy RPC, among others. All transaction flow first enters the middleware, where it's locally aggregated into Bundles by six partner validators (collectively staking 22 million SOL) to form "superblocks" before being submitted on-chain. To avoid duplicate auctions with Jito, the system marks imported transaction hashes and caches them locally for 200 ms, ensuring no transaction appears in both markets simultaneously.
Second is the internal auction. Validators score incoming transactions based on extractable value; searchers submit supplemental Bundles via the Toby-API, and together they compose the final block. Auction proceeds—including searcher tips, net arbitrage profits, and partial liquidation rewards—are converted to USDC hourly. 95% is injected directly into tobySOL's net asset value (NAV), with 5% going to the protocol treasury. Because settlement happens hourly (compared to Jito's daily cycle), users see real-time, second-level yield precision on the frontend, enabling easy comparison and composability with other DeFi yield strategies.
Third is incentive alignment and penalty enforcement. Validators seeking higher order-flow allocation must lock TOBY tokens in a smart contract—their weight in the system scales with the amount locked. If a validator is caught sandwiching or maliciously reordering transactions, its distribution coefficient is cut by 20%, and the offending Bundle contents are published on IPFS for 24 hours for community audit. Validators downgraded twice consecutively lose their OpenMEV whitelist status, and their order flow is automatically rerouted.
11.5% APY, 1 Billion Token Supply, and Quarterly Buybacks
Three months of testnet data, based on 22 million SOL, show the MEV component adds ~4.3% annually to the base staking yield of 7.2%, resulting in a nominal tobySOL APR of ~11.5%. Upon mainnet launch, the protocol aims to scale total staked SOL to 10 million within 12 months, generating roughly $1 million per quarter in buyback funds to support secondary-market liquidity.
TOBY has a total supply of 1 billion tokens: 15% for a genesis airdrop to Solana staking addresses and JTO holders; 25% for validator rewards; 30% for the community treasury; 20% for the team; and 10% for early investors. Governance rights include adjusting the MEV distribution ratio, adding validators to the whitelist, and activating treasury expenditures. A validator's TOBY lockup amount determines its order-flow priority, effectively codifying "order-flow mining" into the protocol. Twenty percent of treasury revenue will fund quarterly buybacks and burns, enforcing a one-way liquidity contraction.
Compared to JitoSOL, tobySOL draws revenue from more diverse sources. Jito's income relies almost entirely on its proprietary Bundle marketplace, while Toby opens its order-flow channels to any RPC, bot, or market maker—potentially capturing richer high-frequency arbitrage, NFT frontrunning, and high-slippage swaps. Unlike Marinade's Staking Auction Market (SAM), Toby takes a reverse approach: validators must first stake TOBY and comply with a "no-sandwich" clause (or face penalties), locking misbehavior costs upfront at the token layer.
How Sustainable Is tobySOL's "High-Yield Bonus"?
Risks are equally apparent. Order-flow channels are highly substitutable—if wallets or dApps switch to RPCs offering higher rebates, OpenMEV's Bundle volume could decline. Validators might run Jito clients concurrently and privately conduct sandwich attacks, undermining honest incentives. From a regulatory standpoint, the U.S. Department of the Treasury is seeking public comment on "the income sources of staking derivatives"; if MEV distributions are classified as securities returns, tobySOL's compliant circulation could be impeded. Furthermore, tobySOL's scale and the TOBY price are locked in a flywheel: growth → increased MEV distribution → rising tobySOL demand → more validators staking TOBY → larger buyback funds → higher TOBY price → enhanced treasury value. Should growth stall or MEV revenue decline, the flywheel could reverse instantly, triggering sell pressure on the token against the protocol treasury.
Overall, Toby integrates MEV revenue into LST dividends, adding a new yield dimension to Solana staking. However, its long-term competitiveness depends on its ability to control order flow and navigate the regulatory landscape. In the first two quarters after its mainnet launch, key metrics to watch—such as staking volume, validator lock-up rate, and buyback execution rate—will indicate whether a sustainable flywheel effect is taking hold. For users, tobySOL offers a way to passively earn "block ordering rights" revenue. For validators, locking TOBY tokens becomes a necessary step to access order flow. For regulators, the question remains whether MEV revenue constitutes a securities return. Whether Toby can establish a second major MEV value chain after Jito will hinge on the depth of its order flow moat and the robustness of its tokenomics. At the very least, Toby has already shown the market that MEV is no longer just a backroom business between validators and searchers—it could become the real-time yield ticking upward in every ordinary staker’s account.