Jito Labs recently unveiled a groundbreaking proposal for a Block Assembly Marketplace (BAM) on July 21st. This innovative system aims to revolutionize transaction sequencing on the Solana blockchain, allowing developers to run central-limit order books, perpetual exchanges, and dark pools without the need to modify the base protocol.
The core concept of BAM involves a network of BAM Nodes that work alongside existing validators. These nodes order encrypted transactions within Trusted Execution Environments and then forward them to the leader with cryptographic attestations of sequence integrity.
One of the key highlights of BAM is its ability to seamlessly transition from privacy to auditability in a single pipeline. By utilizing BAM Validators running an updated Jito-Solana client, the system can execute ordered bundles and provide proofs of adherence to instructions.
The proposal outlines three main technical goals. Firstly, it aims to keep orders private until execution to combat harmful Miner Extractable Value (MEV) while maintaining a public audit trail of every ordered bundle. Additionally, BAM intends to grant applications direct access to scheduling logic through Plugins, allowing for customized execution and flexibility.
Each plugin within BAM has the power to inject or reorder instructions inside the enclave, enabling application-controlled execution for various use cases such as real-time oracle updates or market maker flows. Furthermore, a revenue split model channels plugin fees to node operators, validators, stakers, and the Jito DAO.
The rollout of BAM will occur in phases, with Jito operating the initial BAM Nodes while an alpha validator cohort tests the client. The plan aims to attract a significant percentage of delegated stake post-launch, eventually transitioning governance to the DAO after reaching 50 geographically distributed nodes.
Jito argues that BAM offers institutions deterministic execution and verifiable privacy, essential requirements for high-frequency traders. By eliminating the need for private mempools or off-chain deals, BAM has the potential to attract order flow that currently gravitates towards centralized venues.
The scalability of Solana’s existing throughput positions the chain to function as a decentralized Nasdaq once plugins for perpetuals and dark pools are introduced. Jito Labs plans to submit a governance proposal directing all BAM and block-engine fees to the Jito DAO treasury, shifting value capture from MEV extraction to fee-sharing for scheduling services.
As the Block Assembly Marketplace plan awaits feedback from validators, developers, and token holders, the future looks bright for this innovative system that promises to reshape transaction sequencing on the Solana blockchain.