This episode features Lucas Buffalo from Jito discussing Solana's evolving block building landscape with Carlos and Sam from BlockWorks Research. Lucas leads Jito's development of BAM (Block Auction Mechanism), their latest initiative to bring transparency and verifiability to Solana's block production through trusted execution environments.

The conversation covers BAM's current 25% network stake adoption, its competition with Harmonic's block building approach, and how both systems might coexist before Multiple Concurrent Proposers (MCP) arrives in 12-18 months. Lucas also discusses Jito's expansion into institutional products, including JitoSol ETPs launching across Europe and Asia, and their continued focus on application-controlled execution for prop AMMs and perp exchanges.

BAM's Architecture and Market Position at 25% Stake

BAM runs in trusted execution environments providing privacy and verifiability, allowing applications to verify exactly what software version is running through GitHub comparisons and attestations.

"25% is like the bare minimum. Obviously, the more you have, the better" - Lucas on BAM's current stake threshold for meaningful application adoption.

BAM operates with 50ms batches currently, targeting 20ms batches as the agreed-upon standard among market makers and applications for optimal application-controlled execution.

The system focuses on consistency across blocks rather than algorithm changes that create "additional cognitive overhead" for users trying to understand varying block-to-block behavior.

Coexistence with Harmonic and Block Building Competition

Harmonic has grown to 16% stake with their highest-fee block selection model, making 97% adoption like previous Jito-Agave unlikely in the current competitive landscape.

"The thing that makes the most fees is probably not the best for the network" - Lucas on tensions between fee-maximizing strategies and network health.

Jito positions BAM as focused on "privacy, verifiability, and consistency" while encouraging experimentation through planned open-sourcing after audits complete.

Applications face complexity of conditional logic: "if leader running BAM, I can do this logic. And if not, I can do this logic" until higher adoption rates.

MCP Timeline and Solana Performance Improvements

Multiple Concurrent Proposers will have multiple validators producing blocks simultaneously, then stitched together with protocol-level priority fee reordering for censorship resistance.

"12 to 18 months seems pretty reasonable to me" - Lucas on MCP timeline, but BAM aims to deliver competitive market structure today without waiting for protocol changes.

Agave 3.1 introduces XDP networking technology enabling 100x faster data transmission, crucial for reducing slot times from current 400ms threshold.

Current validators can build entire blocks in 150ms, leaving 250ms idle time, while new pacing mechanisms in 3.1 will linearly release compute units throughout slots.

Application-Controlled Execution and Prop AMM Focus

Primary focus targets prop AMMs due to resource constraints, with "at least three or four calls with different applications every week" to understand requirements.

Phoenix perps achieved 30x compute unit reduction, making market maker updates "50, 100, 200x more efficient" than taker swaps on prop AMMs.

Applications request features like just-in-time Oracle updates and tighter coupling with schedulers, enabling "running your application inside of the block builder."

ACE implementations vary from simple taker speed bumps (like Hyperliquid) to more sophisticated batching systems requiring proper pacing mechanisms.

JitoSol ETP Expansion and Institutional Products

Jito became "the first team to go talk to the SEC Crypto Task Force" about liquid staking and ETPs approximately one year ago, initiating regulatory engagement.

21 Shares launched JSOL ETP in Europe with 100% JitoSol backing, versus traditional staking ETPs requiring 10% unstaked buffers for redemptions.

"Switzerland, no? Yeah, we were moving fast, and then the government shut down" - Lucas on how political changes affected US ETP timelines versus European progress.

Secondary market liquidity for JitoSol enables full staking ratios in ETPs, delivering "slightly higher staking rewards than some of the other products."