Background to the merkle-distributor

A program for distributing tokens efficiently via uploading a Merkle root.

• Jito's initial program is largely based off of Uniswap's Merkle Distributor.
• Light Protocol optimized this program with rent-free PDAs to reduce rent cost.

Rationale

Although Solana has low fees for executing transactions, it requires staking tokens to pay for storage costs, also known as "rent". These rent costs can add up when sending tokens to thousands or tens of thousands of wallets, making it economically unreasonable to distribute tokens to everyone.

The Merkle distributor, pioneered by Uniswap, solves this issue by deriving a 256-bit "root hash" from a tree of balances. This puts the gas cost on the claimer. Solana has the additional advantage of being able to reclaim rent from closed token accounts, so the net cost to the user should be around 0.000010 SOL (at the time of writing).

The Merkle distributor is also significantly easier to manage from an operations perspective, since one does not need to send a transaction to each individual address that may be redeeming tokens.

In this iteration, User ClaimStatus accounts are compressed PDAs, to reduce cost for the claim process:

Account type	Cost per claim	100k claims
PDA	~0.002 SOL	~200 SOL
Compressed PDA	~0.00005 SOL	~5 SOL

License

The Merkle distributor program and SDK is distributed under the GPL v3.0 license.