Is trading SOL no longer being squeezed? Understand Jito's newly launched BAM.

Reducing negative MEV is the first step of Solana's new roadmap.

Written by: Alex Liu, Foresight News

Jito Labs launched BAM (Block Assembly Marketplace) on July 21, aiming to address the long-standing issues of unfair transaction ordering and negative MEV (Maximum Extractable Value) in the blockchain ecosystem, bringing a new transaction processing paradigm to Solana. BAM seeks to build a more transparent and controllable transaction execution chain for Solana, introducing privacy protection, order verifiability, and application-layer programmability while maintaining high performance, achieving an efficient and fair on-chain execution market.

This article will analyze the technical mechanisms, application scenarios, ecological impacts, and development roadmap of BAM, helping readers understand the significance of this new infrastructure.

Background: MEV Issues and Block Construction Reform

In traditional blockchains, transaction ordering is usually determined by block producers (such as the Leader nodes of Solana), allowing certain nodes to gain benefits through prioritizing packaging, reordering, or even sandwiching transactions (known as "front-running" or "priority gas auctions"), which is referred to as MEV. Although this mechanism is called "extracting value," it often harms users and applications in practice, reducing fairness of execution and user experience.

Especially in on-chain trading based on CLOB (Central Limit Order Book), the sorting mechanism directly affects the transaction results. The lack of a transparent and controllable sorting model not only harms users but also impacts the revenue-generating capability of the protocol itself.

Illustration: User being subjected to a "sandwich attack"

The Ethereum ecosystem has introduced a block construction market through PBS (Proposer-Builder Separation) to separate the ordering rights from block proposers, thereby mitigating the MEV issue. On the performance-oriented Solana, BAM proposes a complete set of a sorting market architecture that is compatible from hardware to the underlying protocol in a more aggressive and native way.

Architecture + Plugin Mechanism

The BAM system consists of several core components:

• BAM Nodes: This is a dedicated hardware network running on TEE (Trusted Execution Environment) by Jito, used to receive and encrypt transaction processing. They can filter and sort transactions in a sealed state while generating cryptographic proofs (attestation) to ensure that transaction ordering remains private before execution while being verifiable externally.
• BAM Validators: Validators running the updated Jito-Solana client, executing transactions according to the ordering of BAM Nodes, and generating execution proofs. The execution process follows the ordering requirements to eliminate changes in transaction order.
• Plugins: Developers can build plugins to integrate into the scheduling process of the BAM Node, adding customized sorting logic. For example, prioritizing the handling of oracle updates, order cancellations, transactions from specific user addresses, etc., to create a sorting method that better aligns with actual business logic.

The entire process of the transaction is as follows:

1. Users or applications send transactions to the BAM Node;
2. The BAM Node sorts transactions in the TEE and generates sorting proofs, and can insert additional transactions through a plugin mechanism, such as Just-In-Time oracle data updates. After sorting is completed, the BAM Node generates cryptographic proofs for the sorting and submits the sorted transaction package to the current Leader;
3. The current Leader node executes transactions in order, returns the execution process to the BAM Node, confirms that the execution order is consistent with the instructions, and generates execution proof.
4. All proofs generated by BAM Node and Validators will be published on-chain, creating a complete auditable trail that any third party can verify to check whether the ordering has been tampered with or skipped, thus achieving accountability for transaction execution.

The highlight of this complete process is that it introduces three elements: sorting market, privacy processing, and on-chain verification, enhancing the fairness and programmability of the network without changing the core consensus mechanism of Solana.

Functions and Applications

BAM is not just an optimization of trading order, but also opens up a whole new set of use cases:

• Oracle Just-In-Time Update: As Pyth needs to maintain thousands of price sources. Through plugins, Pyth can insert price updates in the same block where the user trades, avoiding the use of outdated data, enhancing trading accuracy, and reducing clearing risks.
• High-frequency order cancellation support: Similar to high-frequency market makers in traditional finance, BAM supports prioritized processing of cancellation orders, effectively improving the execution efficiency and liquidity of the order book DEX, without worrying about the network being flooded with cancellation orders.
• Custom Sorting Logic: DEX, NFT platforms, perpetual contract protocols, etc. can define their own trading priorities to build execution models that better align with business needs.

These features not only optimize user experience but also provide an trading environment that meets the compliance and execution guarantee needs of institutional traders, which may become a key lever for Solana to further attract institutional capital.

The Role and Economic Model of Jito

The launch of BAM also means that Jito DAO's role in the Solana MEV infrastructure is further strengthened. According to the Jito announcement, in the future, all protocol fees generated by BAM and the Jito Block Engine will flow into the Jito DAO treasury.

In addition, the use and deployment of plugins will bring a new value capture model: developers can collect a Plugin Fee from users, while BAM Node and Validators can earn a share of the revenue through sorting services and execution.

Jito Labs will continue to be responsible for the technical maintenance of BAM, while governance rights will gradually shift to the DAO community to ensure technical neutrality and decentralized development.

Roadmap and Ecological Partners

The promotion of BAM will be carried out in phases:

• Launch Phase: Operated by Jito Labs BAM Node, early collaborating validators include Triton One, SOL Strategies, Figment, Helius, etc.;
• Expansion Phase: Open access for third-party BAM Node Operators, aiming to cover over 30% of the staked equity on the Solana network;
• Open Source and Acceleration Stage: Open source code, empowering more developers to quickly deploy plugins, realizing the complete implementation of decentralized trading construction.

The first batch of cooperative applications includes core protocols of the Solana ecosystem such as Drift, Pyth, and DFlow, and more DeFi, oracle, and trading infrastructure projects will be integrated in the future.

The Potential and Challenges of BAM

BAM brings to Solana not only performance improvements or fairness enhancements but also a shift in "ordering rights" from the protocol layer to developers and users. It makes the on-chain trading environment closer to the certainty, privacy, and accountability required by traditional financial markets, providing the infrastructure support for building DeFi 2.0.

Of course, the implementation of BAM also comes with certain challenges, such as reliance on TEE security, the complexity of designing sorting plugins, and how to balance the degree of decentralization of the network, which still needs to be continuously verified in future developments. In the future, whether BAM can truly "make Solana win" remains to be seen.