tl;dr
On July 21, Jito Labs proposed the Block Assembly Marketplace (BAM), a transaction-sequencing system for Solana that enables complex financial applications without altering the base protocol. BAM Nodes order encrypted transactions within Trusted Execution Environments, ensuring privacy until executi...
On July 21, Jito Labs unveiled a proposal for a Block Assembly Marketplace (BAM), a transaction-sequencing system designed to empower developers to run complex financial applications like central-limit order books, perpetual exchanges, and dark pools on Solana without modifying the base protocol. This innovative system introduces BAM Nodes that operate alongside existing validators, ordering encrypted transactions within Trusted Execution Environments and forwarding them to the leader with cryptographic proofs that ensure sequence integrity.
The BAM design focuses on harmonizing privacy and auditability: orders remain private until execution to mitigate harmful MEV activity, while simultaneously maintaining a public audit trail of every ordered bundle. BAM Validators, running an enhanced Jito-Solana client, execute these ordered bundles and produce proofs confirming compliance with instructions. A key feature is the introduction of Plugins that offer applications direct control over scheduling logic inside the secure enclave, enabling advanced functionalities like just-in-time oracle updates and priority cancel-replace flows tailored for market makers.
Jito Labs outlines a revenue-sharing model where plugin fees benefit node operators, validators, stakers, and the Jito DAO. The rollout will begin with BAM Nodes managed by Jito and an alpha cohort of validators including Triton One and Figment. The initial goal targets securing a high single-digit percentage of delegated stake, eventually aiming for 30% or more as additional node operators join. The initiative plans to open-source the BAM code and expand to 50 geographically dispersed nodes before transferring governance to the DAO.
Jito Labs contends that BAM can fulfill two critical demands from institutions: deterministic execution and verifiable privacy. By enabling custom transaction sequencing without resorting to private mempools or off-chain deals, BAM aspires to reclaim order flow currently shifting towards centralized exchanges. With Solana's robust throughput, Jito envisions the chain evolving into a decentralized Nasdaq once plugins for perpetuals and dark pools become operational.
The proposal includes submitting governance suggestions to allocate all BAM and block-engine fees to the Jito DAO treasury while Jito Labs continues providing technical upkeep. This strategy aims to transition value capture from MEV extraction to fee-sharing from scheduling services. Currently, the Block Assembly Marketplace plan is open for feedback from validators, developers, and token holders before progressing to production testing.