Jupiter is a DEX liquidity aggregator on Solana, designed to help users discover the “best prices.” It also has advanced features to improve accessibility, such as limit orders and USD price averaging (DCA).
Solana supports a number of decentralized exchanges that offer direct asset swaps using liquidity pools and automated market makers (AMMs). However, liquidity conditions between different asset pairs on these exchanges are different. As a result, prices for the same asset can vary quite widely and liquidity conditions can also lead to higher slippage on some of these exchanges.
Jupiter was launched in 2021 and is a dedicated platform for DeFi enthusiasts on the Solana network. The project claims that the platform will help save costs, encourage best use of protocols on the network, and promote adoption of the Solana blockchain for the decentralized finance space.
Jupiter: DEX liquidity aggregator on Solana
According to browser data, Jupiter is one of the most used applications on the Solana blockchain. The platform claims to process over $350 million worth of daily trading volume from over 100,000 unique wallets.
Jupiter is a DEX liquidity aggregator; connects to several decentralized exchanges to provide users with a route to interact with these exchanges through a single interface. Through the connection, Jupiter can obtain core data such as liquidity conditions between asset pairs, asset prices and liquidity provider fees, etc. Using this data, Jupiter will choose the route Program for the best deals for users.
Depending on actual conditions, transactions can be routed through multiple liquidity pools. Each move is called a Hop and a swap transaction can go through 3 Hops.
Jupiter claims that this system allows traders to easily use, improve efficiency and save the most resources for each transaction. Its liquidity aggregator connects to over 20 DEXs and AMMs on the Solana network.
However, Jupiter's utility is not limited to direct asset swaps through multiple exchanges. The platform has several other advanced utilities to improve user experience.
Key features of Jupiter
Let's take a look at some advanced utilities and what they bring to Jupiter users.
Limit Orders
Centralized exchanges often offer limit orders, allowing traders to set up trades that will only execute when stated conditions are met. This system is easy to operate on centralized exchanges because they use order books, a record of buy and sell requests for a pair of assets. For decentralized exchanges, this is a bit more complicated due to the nature of AMMs and liquidity pools.
On Jupiter, when a user places a limit order, the protocol holds the order including details of the set parameters (sell/buy price and quantity) in the protocol. The protocol then pulls prices from supported decentralized exchanges and monitors these changes. When the market price reaches the point set by the trader, it will move to execute the transaction. In case of insufficient on-chain liquidity, the platform will execute the transaction in smaller installments until the order is completed.
Jupiter claims that its decentralized limit order feature works with the same efficiency as on centralized exchanges. The only difference is the absence of market makers, order books and centralized control systems.
USD Cost Averaging (DCA)
USD cost averaging (DCA) is a popular method for buying spot assets. Here, traders divide transactions selling or buying an asset at different time periods. The idea is to increase the trader's chances of capturing tops (to sell) and bottoms (to buy) instead of trading all at once with a single price point.
Using Jupiter's DCA feature, traders will specify different prices (or ranges) at which they want to buy as well as the amount and time period for this trade.
For example, a trader might decide to buy $1,000 worth of Solana (SOL) for ten days (note that this period is variable), for $100 per day at certain prices. The protocol will transfer $1,000 into the DCA program, held in a vault. As each trade is made, assets are transferred to the trader's wallet. For non-SOL assets, traders must create an Associated Token Account (ATA) to enable automatic transfer of purchased tokens to their wallet.
Bridge
Jupiter is also a liquidity aggregator for bridges. Operating similarly to a liquidity aggregator for DEX, it collates data from supported bridges and provides users with a roadmap to trade assets, according to actual market conditions. After selecting a route, users will be redirected to their favorite bridge to complete the transaction. Bridges supported by Jupiter include Mayan Finance and Debridge.
Jupiter also supports Wormholes for asset connectivity. Wormhole is an inter-network messaging protocol that allows communication between blockchains. At the moment, Jupiter's bridge is powered by Wormhole, which connects assets between the Ethereum and Solana blockchains.
Permanent contract
Perpetual market traders bet on the future price of an asset. Jupiter has a decentralized perpetual trading platform where users can open long or short positions with up to 100x leverage. Users can participate as traders or liquidity providers (LPs).
Liquidity providers on derivatives exchanges lock their assets in permanent vaults and earn profits when traders use these funds for their trades. Perpetual Vault currently supports 5 assets: WBTC, USDT, USDC, SOL and ETH.
Traders use collateral and receive funds from the vault according to their collateral and the chosen leverage factor. For example, if a trader uses 5X leverage on 20 USD worth of collateral, the trading capital will be: 20 x 5 = 100 USD.
The perpetual trading platform operates in the same way as other centralized derivatives trading platforms. However, the money used for leverage comes from liquidity providers. According to Jupiter, the perpetual exchange ensures zero price impact, zero slippage, and deep liquidity by using liquidity from the Pyth network's LP pool and oracles for price feeds.
Jupiter LFG: Launchpad for Solana projects
On January 23, 2024, Jupiter announced the launch of LFG, the launch pad for Solana projects.
According to the announcement, LFG will serve as a platform to guide new projects to the market. Jupiter claims that the LFG launchpad will be supported by the community and does not have any incentives or price discovery system. Jupiter DAO will oversee core aspects of the launchpad, including approval of projects, through a vote from the community.
Approved projects will receive the technology support of the Jupiter platform, including a custom launchpool, synthetic liquidity pool, and integration with bot networks that the project can use. With launchpad, Jupiter hopes to energize new projects and protect buyers from hype, fomo and carpet pulling.
Instructions for swapping on Jupiter
To use Jupiter, visit the platform's official website.
Click on Connect Wallet to connect the wallet to the platform.
Users can perform Direct Swap, place a Limit order or use the DCA feature for their swap transactions on Jupiter.
Swap directly on Jupiter
To perform a Direct Swap, navigate to the Swap section
1. Select the asset you want to swap.
2. Enter the amount you want to swap.
3. Click on the Market section on the interface and set the trading priority.
To make transactions faster, users can set higher priority, with higher fees.
4. Set the slippage level for the transaction.
5. Click on the Swap item to continue.
Approve the transaction from the wallet to complete.
Limit order swap on Jupiter
To execute a limit order swap, select the Limit Order item.
1. Select the asset you want to swap.
2. Set the selling price for the order.
3. Set the order's expiration time.
4. Select the amount you want to trade.
5. Press Place Limit Order to continue.
Approve the transaction from the wallet to complete.
Use the DCA feature on Jupiter
Go to DCA, navigate to the DCA section.
1. Select the asset you want to swap.
2. Set the time period for DCA swap transactions.
3. Enter the number of swap orders.
To activate the strategy, select the Switch icon and enter a price range for the trade
4. Click Start DCA to continue.
Approve the transaction from the wallet to complete.
Jupiter Token (JUP)
The Jupiter development team has shared plans to launch JUP, the platform's native token. JUP will not only be integrated into the project but will also aim to create relationships between the development team, early backers and the community.
Through a post on X, the Jupiter development team shared that the total supply of JUP tokens will be set at 10 billion, which will be used equally between the project team and the community.
Source: Jupiter
The update states that, 10% of the total token supply will be used to provide initial liquidity to JUP. The remainder of the development team's supply will be divided between strategic reserves' and core staff. The development team's token will be unlocked after 1 year and will take place within 2 years. The 50% reserved for the community will be committed to reward programs, including airdrops for early backers and community grants. At launch, 15-20% of total supply will be in circulation, with 10% from the upcoming first airdrop and 5% to provide liquidity. According to the development team, this is scheduled for January 2024.
50% – managed by the project development team
20% -Current members
20% – Strategic reserve
10% – Provides liquidity
50% – Distributed to the community 40% - 4 rounds of Airdrop
10% – Donations and sponsorships
Source: Jupiter
The Jupiter Token will provide support for the Jupiter DAO. The community will decide the work of the project through the DAO.
Jupiter Token Airdrop
The Jupiter team also shared additional information regarding the community airdrop program. JUP's tokenomics includes a 40% reserve for community reward programs. According to the development team, there will be many different airdrops, starting with the airdrop of 1 billion JUP tokens in the first round expected in January 2024.
20% of the airdrop supply will be evenly distributed to all eligible wallets. Community members who are active on the media will split 10% of the airdrop while the remaining portion (70%) will be distributed to qualified wallets according to trading volume on the platform.
Users can interact directly with the Jupiter platform or through other related platforms to qualify to participate in the airdrop. The development team suggests that token allocation to each wallet will be considered depending on interaction frequency and total transaction volume.
There is also an OG Bonus program for users who generate at least $10 in transactions on Jupiter before the end of March 2022.
https://tapchibitcoin.io/jupiter-la-gi.html
