Original author: Paul Timofeev
Original translation: TechFlow
Solana’s Renaissance
Solana is a proof-of-stake (PoS) layer 1 blockchain optimized for high performance and throughput to deliver fast execution speeds and low transaction costs. Its unique architecture is significantly different from the EVM chain, allowing developers to focus on building plug-and-play applications in Rust. Solana currently supports 121 protocols in its ecosystem, is maintained by 2,156 validating nodes (second only to Ethereum), and ranks fifth among DeFi blockchains in total value locked (TVL) at $1.38 billion.
Solana has faced and overcome many challenges in its short but eventful history, such as network instability, dangerous relationships with SBF and Alameda that led to a large loss of users, developers, and liquidity. Despite this, co-founder Anatoly Yakovenko has been closely connected to the user and developer community, and has remained positive and forward-thinking even in the lowest of times, demonstrating Solana's resilience and willingness to adapt and overcome adversity.
In 2023, as the price of Bitcoin rose around the expectation of SEC approval of spot ETFs, the crypto market finally rebounded after a long period of sideways trading. The price of $SOL followed closely, rising from $9.98 on January 1, 2023 to $101.51 on January 1, 2024, a return of 917.134%. As SOL gradually continued to maintain a strong upward momentum in the market, MadLads minting went online, and the team announced a points program and airdrop, an emerging narrative around the unique architectural design of "applications that are only possible on Solana" began to attract the attention of users, investors, and developers.
Solana DeFi Performance in 2023
From January 1, 2023 to January 1, 2024, Solana’s TVL and on-chain transaction metrics both increased significantly. This period marked an important stage in Solana’s development, with transaction value and volume increasing significantly despite a decline in TVL following the FTX crash.
Key Highlights:
TVL Growth: Solana’s TVL grew 574% from $210.08 million to approximately $1.47 billion.
Total Exchanges: 314, 556, 244 exchanges were performed on the network.
Total Trading Volume: The total trading volume of the platform reached 420,366,925,06 USD.
Solana’s DEX monthly trading volume reached US$23.8 billion in December, setting a new annual high for 2023.
Jupiter Introduction
Jupiter launched in September 2021 as a DEX aggregator on Solana, aiming to provide Solana users with a better trading experience by delivering liquidity from multiple sources rather than a single source. Although Jupiter started out as just an exchange engine, the protocol has evolved into an important liquidity layer for multiple different products for different users and has become a key component of the Solana ecosystem.
Jupiter’s business model is driven by three core pillars:
Provide the best user experience
Maximizing the Potential of Solana’s Technical Capabilities
Improving Solana’s overall liquidity profile
2023 has been a busy year for the Jupiter team, with several new core product launches including new DCA functionality, limit orders, and perpetual contract trading. There have also been multiple upgrades and optimizations within the core protocol including an upgraded algorithm (Metis), a bridge comparison tool, instant staking SOL > SOL swaps, and more development tooling including the release of the Jupiter Terminal and two major API upgrades.
Jupiter 2023 Trading Volume Review
Jupiter’s total trading volume reached $62,816,562,781, accounting for approximately 60% of all Solana DEX trading volume.
Jupiter’s monthly trading volume grew 994.48% from $6,4925,8200.00 in January 2023 to $7,106,000,000.00 in December 2023. After Breakpoint announced $JUP, trading volume exceeded $16 billion in November, setting a new all-time high for monthly volume. Even more impressive is that this increase in volume (mostly in Q4) came primarily from organic trading activity.
In this report, we will analyze Jupiter's product pipeline and future plans, and explain the logic behind our investment approach.
AMMs and Aggregators
Automated market makers are a novel innovation in the digital asset space over the past few years. On traditional exchanges (like Coinbase or Binance), a third-party entity operates to provide liquidity so that traders have a counterparty, which is the other side of the trade. These counterparties are called market makers because they "create" a market for traders to trade in, while charging a spread (fee) on each trade to remain profitable.
With the advent of AMMs, traders can deploy digital assets for which markets are made by math and code rather than complex middlemen. By using AMMs, traders can enter and exit positions even with extremely low liquidity. One downside of low liquidity is that traders experience slippage, the difference between the expected transaction value and the realized transaction value. Traders can also lose value on trades through the exploitation of information asymmetry in the public mempool, such as being front-run or pincered by sophisticated actors deploying MEV bots.
On-chain aggregators emerged to mitigate the impact of low liquidity trading, allowing traders to place orders that route liquidity from multiple sources instead of just one. Liquidity can be sourced from a variety of sources, including AMMs; although some teams have built solutions that enable market makers to tap into off-chain liquidity (i.e. CEX positions) and help settle trades.
The main benefit of this is better pricing because:
Transfers within CEX do not incur any gas costs, while on-chain transfers have costs
Transactions are not affected by MEV withdrawals
Aggregators, in general, aim to provide a better user experience. Large content platforms like Meta or YouTube act as aggregators of content, allowing users to view videos and images from many different websites without leaving the interface. Google aggregates information related to your search query from many different websites on the internet to provide the best matches in order of relevance. Similarly, Jupiter and other DEX aggregators source liquidity across multiple trading venues to provide traders with better trading prices.
SVM-based construction
To better understand Jupiter as a protocol, it is important to understand the role of the Solana Virtual Machine (SVM) and how it influences the protocol design choices developers must make.
A virtual machine can be best described as a single entity maintained by thousands of networked computers running validating clients for a particular chain (such as Ethereum), and is the environment in which all smart contracts and accounts actually exist. To this day, most DeFi and other on-chain activities are conducted through the Ethereum Virtual Machine (EVM). However, despite no longer being in the spotlight, we believe that the SVM also has a strong architecture that will surely continue to attract more developers seeking to build consumer-facing applications optimized for speed and performance.
Smart contract code written in Rust, C, C++ is compiled into BPF bytecode by SVM. The Sealevel Engine is a key component for enabling parallel processing on Solana; with the integration of state access lists in Solana transactions (transactions contain details of specific states to access), this allows non-conflicting transactions to run simultaneously, resulting in faster overall performance.
While EVM is a single-threaded runtime, meaning it can only process one contract at a time, SVM is multi-threaded and can process more transactions in a shorter time. Each thread contains a queue of transactions waiting to be executed, and transactions are randomly assigned to the queue.
The emergence of L2s like Eclipse and Nitro that leverage SVM execution shows the potential for further SVM adoption. Earlier this year, MakerDAO’s Rune Christensen sparked a lot of debate on Twitter when he proposed the vision of developing the MakerDAO Application Chain using the Solana codebase.
One of the most common complaints about Ethereum is that gas fees increase as user activity increases, resulting in an unpleasant user experience in most cases, especially during bull markets. No matter how high the gas fees are, traders’ needs are simple: get the best quotes possible. Aggregators like 1inch aim to provide users with better prices by sourcing liquidity from multiple sources, rather than just one specific DEX. However, trading on Ethereum, such as sourcing liquidity from multiple different pools, is an expensive task that may actually worsen the problem it is intended to solve, and trading on Uniswap, which only sources liquidity from one place, may actually be more beneficial.
Meanwhile, the opposite is true for Solana, which costs less than a penny in gas by default. The cost of obtaining liquidity from multiple sources is almost the same as obtaining it from one source, so on a chain like Solana, a DEX aggregator is more practical and beneficial than on an EVM chain. As the leading aggregator on Solana, we believe Jupiter is more poised for significant growth and adoption in the long term, while aggregators on the EVM chain face higher costs and greater competition.
The same philosophy applies to other use cases beyond simple A-for-B trades, such as providing users with structured dollar-cost averaging (DCA) or time-weighted average price (TWAP) products, which are further elaborated below. The basic principle remains that low gas brings great flexibility to application developers on Solana, and Jupiter is a best practice example of this.
product description
Jupiter Swap
As with any other decentralized trading venue, the most common use case on Jupiter is a simple swap of Token A and Token B. Users can exchange their favorite assets at competitive prices. Slippage and priority fee settings are fully customizable, and general settings enable users to choose direct liquidity routing, use wSOL instead of SOL, and use versioned exchanges (which use newer, better routing algorithms).
Developers can also leverage the Swap API to natively integrate Jupiter’s routing algorithms into their dApps. For example, Kamino Finance uses Jupiter’s Swap API to implement features such as unilateral deposits of assets into their CLMM repository (Autoswap).
While we believe continued growth and sustainable adoption of Jupiter and Solana DeFi will prompt the JUP DAO to vote to implement fees at some point in the future, at this time Jupiter does not charge any additional swap protocol fees beyond base gas fees and associated DEX fees. It will be interesting to see how this decision plays out given increased network activity driving higher demand and costs for blockspace, as well as a potential restructuring of the Solana fee market. Currently, the 1inch aggregator on Ethereum does not charge swap fees, while CowSwap recently proposed a fee switch that would charge swap fees with the goal of becoming financially self-sufficient while maintaining user incentives.
Limit Orders
If a trader believes that the price of an asset will change in the near future, they can place a limit order instead of buying the asset at the current market price. A limit order is a signed message with clear trade execution guidelines or intent, providing traders with flexibility, as well as other benefits such as better price settlement due to protection from MEV-induced slippage. This model has benefits for both retail traders and institutions, and Jupiter now provides a venue for traders to place limit orders on Solana.
When a user places an order to buy 1 SOL worth of $WIF, the order is ultimately matched by a keeper, a trusted protocol participant responsible for monitoring prices and executing orders. The keeper functions similarly to a solver on CoWSwap or a filler on UniswapX. Once the order is executed, the specified asset appears in the user's wallet.
Jupiter’s limit order feature offers a wider selection of tokens, and token pairs can be traded as long as there is sufficient liquidity in the market. In addition, users can specify an expiration time in their orders, at which time any unfulfilled orders will be canceled and returned to the user’s wallet.
DCA
Dollar Cost Averaging (DCA) is a common investment strategy that involves splitting capital allocations into multiple trades instead of one; this is great for long-term investors who don’t care about short-term volatility (e.g., buying $500 of SOL for 5 consecutive days). DCA can be very useful when accumulating assets in a bear market, the principle being to average out one’s entry prices to mitigate volatility and achieve greater returns over time and as market conditions change. Likewise, DCA can help with profit taking in a bull market, as instead of selling one’s position completely at once, DCA can help spread out sales to capture any additional upside that may occur during a liquidation, rather than selling the position completely at once.
Traders can also execute a Total Weighted Average Price (TWAP) strategy to buy or sell an asset. Similar to DCA, TWAP is often used for large orders that need to be split into smaller parts to prevent price impact (losing money) from buying all at once. Since orders are executed over a period of time, they are similar to a DCA strategy, which is to buy "x" amount within a certain period of time.
Due to Solana’s high-throughput architecture, Jupiter is one of the few platforms that enables users to execute frequent time-limited strategies on-chain. DCA for low timeframe trades on Ethereum (e.g. daily) can result in hundreds of dollars in transaction fees, while on Solana it’s just a few cents. Even on L2, if a trader wants to execute 10 trades in 1 hour, the fees can quickly add up.
Perpetual Contract
To further enrich its wide range of products, Jupiter also launched an LP-Traders perpetual contract exchange earlier this year. Although still in beta, traders can trade SOL, ETH, and wBTC perpetual contracts with up to 100x leverage, while LPs can provide capital to earn fees.
Perpetual contracts are derivative contracts similar to traditional futures that enable traders to take on larger positions with smaller capital allocations (leverage) in order to take advantage of future price fluctuations.
On Jupiter, traders can open long or short positions on SOL, ETH, and wBTC using nearly any supported Solana token as collateral. Long positions require a corresponding underlying (e.g., a long SOL-USD position requires SOL collateral), while short positions require stablecoins as collateral. Traders can take on leverage by borrowing assets from liquidity pools - a SOL-USD position can be leveraged up to 2x by borrowing 1x SOL from the JLP pool.
Similar to the dynamics of the GLP pool on the perpetual swap exchange GMX, Jupiter Perps leverages the JLP pool, which includes SOL, ETH, WBTC, USDC, and USDT. Providing liquidity simply requires depositing any supported Solana token into the JLP pool in exchange for an equivalent value of $JLP tokens. The JLP pool earns 70% of the fees generated by Jupiter Perpetuals, and the price of $JLP grows in tandem with the value of the underlying pool.
JLP pools also benefit the greater Solana ecosystem as Jupiter Swap is natively integrated into the perpetual swap, meaning not only can any token be used as JLP collateral, but Solana traders can benefit from the increased liquidity of the JLP pool and receive better trading prices.
Unlike the aforementioned features, Jupiter’s perpetual contract exchange charges more fees to both traders and LPs. Traders pay fees to the pool based on the hourly borrowing fee or funding rate, which is based on the hourly borrowing rate, position size, and token utilization, and can be expressed as:
Funding rate = (borrowed tokens / tokens in the pool) * 0.01% * position size
LPs also need to pay their own portion of fees for opening/closing positions and exchanging different assets within the JLP pool.
Regarding the JLP pool, it should also be noted that given the target ratios set for each token in the pool, any logic that moves the token ratios away from the target will incur higher fees, while logic that moves the ratios towards the target will incur fee discounts.
Decentralized perpetual swap exchanges, represented by GMX and dYdX, remain relatively underdeveloped compared to their CEX counterparts and have a lot of room for growth and adoption. Perpetual swaps are another example of a low-latency application that benefits from Solana’s fast execution and low transaction costs, although Jupiter will face competition from established players in the Solana perps space, such as Drift Protocol, 01 Exchange, Zeta Markets, Mango, and others.
Making the pie bigger: Jupiter’s vision
When the pie gets bigger, everyone gets more of it.
As an important part of the Solana ecosystem, Jupiter benefits by helping as many new users and developers join the ecosystem as possible. In addition to providing value through an outstanding product, Jupiter aims to empower its community and the broader Solana ecosystem through several new initiatives:
$JUP: The governance token for the new DAO (more on this below)
Jupiter Start: For an ecosystem seeking sustainable growth, it is imperative to strike a balance between being open to innovation while being objectively critical of poor application design and being wary of teams that try to exploit narratives and biases in the market.
Jupiter Start aims to be a platform between the Jupiter community and the broader Solana ecosystem to “help vet, debate, understand, and highlight great new projects.” This includes the Jupiter launchpad to help bootstrap new projects, pre-listing trading availability for new tokens, and Atlas, a new public seed funding program that allows the community to invest in early-stage projects, as well as various community-focused educational program initiatives.
If you are interested in learning more about Jupiter Start, we recommend reading this blog post.
Jupiter Labs: This is a collective effort between the Jupiter team, community, and DAO to develop innovative products and tools for Solana DeFi. While these initiatives will begin on Jupiter, they are ultimately designed to be independently launched and run as protocols on Solana. Jupiter users will receive priority access to early product testing and receive associated incentives, a portion of which will be allocated to the JUP DAO.
The first product to go live is the perpetual swap exchange, which is already live in beta, and a proposal for sUSD, a stablecoin backed by SOL (similar to LUSD:ETH) that uses leveraged LST to generate yield.
More about $JUP
Jupiter announced the $JUP token at a watershed moment for Solana, a strategic decision made after the protocol reached many key milestones, including a broad and active user base, several major platform upgrades and new products, a range of ecosystem projects, and of course, belief in the future uptick in Solana activity.
The maximum supply of $JUP is 10 billion, and the token distribution is evenly divided into 2 cold wallets - the team wallet and the community wallet. The team wallet will be used for allocations to the current team, treasury and providing liquidity, while the community wallet is used for airdrops and various early contributors.
From day one, 15% - 17.5% of tokens are in circulation, 10% - 7.5% are in hot wallets, and 75% are in cold wallets.
A retroactive airdrop will be made to 955,000 early users of Jupiter (before the deadline of November 2, 2023), as well as an airdrop designed to attract new users and liquidity. The DAO will then vote on the token unlock data, and the tokens will be initially locked up, with an unlock date set by the DAO. JUP holders will be able to vote on various key aspects of the Jupiter protocol and the role of the token, including the timing of the initial liquidity provision, future emission schedules, whether the project will be featured on Jupiter Start, and more.
“The initial value of JUP will be a symbol of Jupiter and DeFi 2.0, just like the value of UNI was a symbol of Uniswap DeFi 1.0.”
Fundamental Investment Catalysts
Now that we have discussed the components of the Jupiter Protocol, we can now explain the long-term investment opportunity we envision.
Betting on Solana
Solana’s roadmap is ambitious and exciting, and we expect ecosystem activity to continue to grow in 2024, building on momentum from Q4 2023. We believe this for a number of reasons:
More Airdrops: Marginfi and a few other DeFi teams ignited the Solana ecosystem with their points program earlier in the summer of 2023. The JTO airdrop exacerbated the already growing momentum on Solana, creating a wealth effect that made many jitoSOL holders happy, but also left many dissatisfied and looking for the next big opportunity. Starting with Jupiter ($JUP), others worth watching include Kamino, Marginfi, Drift, Tensor, and more.
Firedancer: Jump Crypto’s highly anticipated validator client, dubbed “Solana 2.0” by Toly himself. Expected to be a long-term boon to Solana’s performance and throughput as the network scales and evolves, Firedancer marks a major milestone for Solana as it increases client diversity, thereby reducing the risk of single points of failure on the network. Applications will become faster with low latency, an attractive selling point for users and developers alike. With Firedancer likely to go live in 2024, we expect a lot of speculation and growing interest around this milestone.
DePin: This is a new area in crypto that shows how tokenized assets can be used to help decentralize real-world business models. Solana has successfully attracted many projects, including Helium and Hivemapper. The interest in DePin as an emerging area has in turn brought more positive attention to Solana as the network demonstrates its utility in serving more specific use cases.
Payments: Solana Pay is now integrated with Shopify, meaning merchants can accept Solana payments, meaning the average JTO airdrop recipient can buy over 2,000 cups of coffee with their earnings. While there are still hurdles to overcome to actually get shoppers to pay in Solana Pay, the partnership with the largest e-commerce platform is a great start. Additionally, earlier this year, Visa, one of the world’s largest payment networks, announced plans to leverage Solana for a stablecoin settlement pilot, an experiment to test the capabilities of blockchain settlement rails with the goal of building new products for commerce and money movement. Solana’s high throughput, fast finality, low transaction costs, and node availability are all positives for Visa, just as Visa’s brand can bring a lot of attention to Solana. If successful, we believe the stablecoin settlement pilot will mark a major milestone in the development of real-world crypto use cases, and Solana will benefit as the de facto network to make it happen.
Last but not least, the Saga Phone. While Solana’s phone may not be very successful in its first year, given the impact mobile integration has had on social media and payment apps, it could be an exciting development in the long run to promote a mobile-friendly crypto landscape and apps. The Solana Phone recently airdropped BONK tokens to purchasers, and the team recently announced version 2.0 of the phone, including cheaper prices ($450) and a recommended leaderboard to drive more user engagement.
Solana’s Challenges
While we remain bullish on Solana’s long-term growth, we expect the Solana core team and developer community to address several key issues in the short and long term that we will be watching closely:
Fee Markets: While Solana now introduces priority fees, there is no native mechanism to determine a “market” priority fee to help effectively limit spammers (i.e. EIP-1559). With demand for block space now significantly higher on Solana, more and more users are experiencing transaction failures, further demonstrating the need to upgrade the network’s current fee market structure. Proposed solutions involve dynamic account fees and multi-dimensional EIP-1559, where fees grow exponentially for each account that touches the exact same hotspot.
EVM Competition: While we believe that in the long term SVM vs. EVM will not be a zero-sum game and different networks will specialize in their respective categories, today Solana is still competing with the EVM space for market share and users, which is a large gap to bridge ($140 million vs. $3 billion gap).
EIP-4844 aims to significantly reduce the cost of L2 (80-90%) and make it easier to use/deploy, which can solidify the leadership position in Arbitrum, Optimism and Base. Similarly, Celestia offers more flexibility and lower costs for L2 developers, which may attract talent and users away from Solana.
The re-staking narrative is likely to be one of the biggest catalysts for Ethereum and could bring in a lot of capital inflows. Security risks aside, investors seeking native yields on native L1 assets will seek opportunities to earn higher returns, which provides Ethereum stakers with an opportunity to re-stake.
Parallelized L1: Parallelized L1 chains (MoveVM, Sei, Monad) are rising in popularity, optimizing for speed and performance similar to Solana, but are still young and immature. Monad, built by several team members with backgrounds in high-frequency trading, aims to bring Solana-like performance to the EVM environment, theoretically combining the “best of both worlds” with transaction speeds of up to 10,000 transactions per second. However, these chains not only face the difficulty of overcoming Solana itself, but also have to compete with the Neon EVM, which enables Solana compatibility through the Ethereum native environment. Aave recently published a proposal on its governance forum to discuss whether to deploy its V3 protocol on the Neon mainnet. With all this in mind, we believe that Solana’s resilience is its greatest strength and long-term catalyst, and it has shown an ability to overcome macro challenges (such as the collapse of FTX) or technical shortcomings (such as network outages).
Betting on Solana = Betting on Jupiter
“Our vision for the future is closely tied to the growth and prosperity of the Solana ecosystem,” Jupiter’s green paper reads. “We are driven by our belief that a thriving Solana ecosystem will bring collective benefits to all stakeholders. Simply put, when the pie gets bigger, everyone gets more of it.”
We believe Jupiter’s key role in the Solana DeFi space makes it a viable bet for both near-term and long-term adoption of the network. The thesis is pretty simple. More users on Solana = more users on Jupiter. Solana’s initial boom lasted for about a year (2021), during which time protocols like Saber and Serum dominated the DEX space. Jupiter gained traction shortly after launch with the goal of leveraging DEX’s on-chain liquidity rather than stealing market share to provide a better user experience and better pricing. However, it wasn’t until the fall of the once-dominant Solana DEX Serum that Jupiter became the market leader it is today.
In 2023, Jupiter has accounted for more than 60% of DEX trading volume on Solana.
Analyzing Jupiter’s business model
Initially, Jupiter’s core product was simply an exchange engine optimized for better pricing, with no additional fees to traders. As the project grew, and volume and traders continued to grow, the team launched several new products that now serve as an organic revenue stream for the protocol through fees. We believe that the JUP DAO will naturally seek to ensure that $JUP holders receive a percentage of the proceeds from these fees as well as future opportunities in Jupiter Start and Jupiter Labs.
Limit Order: 30 BPS
DCA： 10 BPS
This is a unique product and I think Jupiter could leverage it further by raising fees (around 20 BPS).
Perpetual Contract
Open/Close: 10 BPS
Swap Fee: 0 - 200 BPS (varies based on pool weight)
Borrowing rate = 1 BPS/hour * token utilization %
The JLP pool receives 70% of the fees generated by Jupiter perps
External Protocols
If a protocol integrates Jupiter’s framework into their own software and then charges their own fees, Jupiter will ensure they receive a portion of those fees as well.
What If
Jupiter Start: We think it may be wise to leverage the Jupiter Start program (i.e. Launchpad and Atlas) to create additional income streams for Jupiter and $JUP holders.
Launchpad: Establish transaction flow for projects incubated or operated by Jupiter Launchpad, with a portion of project revenue going to JUP DAO.
Atlas: Create an efficient model to collect revenue from realized gains from public seed funding programs and distribute it to participating holders and investors.
Jupiter Labs - As perpetual contracts have already demonstrated, Jupiter Labs supports the development of protocols that can generate additional revenue for Jupiter.
Another proposal for sUSD is in the works
An interesting question to consider here is how these initiatives might one day be independently launched and operated, as outlined in the Jupiter document, and how doing so would impact specific revenue streams.
Exchange Fees
Jupiter’s exchange engine has always been the core product that Solana users have come to know and love. However, as fee dynamics on Solana continue to evolve, transactions will undoubtedly become more expensive as more smart contracts compete for less block space. Jupiter has positioned itself as allowing traders to pay a priority fee to get faster execution, and if this feature continues to be adopted from this point on, it would make sense to charge an additional fee for the service Jupiter provides (there is no native way to calculate a “base” priority fee).
Jupiter's Competition
Overall, we believe Jupiter is uniquely positioned in its role as an aggregator as there is no direct competition with any one trading protocol on Solana at this time. That said, as the Solana DEX ecosystem continues to grow and demand for low-latency trading applications grows, Jupiter will naturally face challenges keeping up with the latest innovations and developing projects. Ultimately, traders want better settlement and will act when that happens.
Additionally, Jupiter faces greater competition for its other products (such as perpetual contract trading), which would generally incentivize teams to recreate a DCA product or something similar.
The DEX landscape on Solana is evolving and becoming more competitive. Outside of Solana, the competition is even more intense.
Jupiter’s competitive advantage is providing price settlement for users; if a protocol emerges that offers better pricing, users are more likely to go there.
Swapping remains the primary use case; swap engine performance is critical.
Niche products (Perps, Limit Orders, DCA) have stronger competition and competitors can offer lower fees.
Advice for Jupiter
More transparency about fees and revenues, as well as dashboards of product performance data would be helpful for investors.
JUP holders should be the main beneficiaries of Jupiter’s revenue streams (Limit Orders, DCA, Perps, Jupiter Start + Labs).
Consider leveraging off-chain liquidity (i.e. CEX LP inventory) as well as a routing model for on-chain liquidity to provide better pricing for users. Similar to 1inch Fusion, Matcha by 0x, CoWSwap, etc.
This will apply to swaps, limit orders and DCA.
Ensuring that $JUP holders receive a portion of the revenue generated by Jupiter Labs products and services.
Ensure that any team that Jupiter Start supports, either through startup incubation or through public seed funding, allocates a portion of the fees to $JUP holders when implementing their protocol.
Ensure that large-scale airdrop distributions do not dilute the quality of participants representing the JUP DAO.
Future Outlook
Given its unique position in the ecosystem, we believe Jupiter is a viable bet for Solana’s near- and long-term adoption.
As network activity on Solana continues to increase, we expect Jupiter to capture a significant amount of liquidity through its established ecosystem presence, diverse product suite, and sustainable revenue model, which should benefit $JUP holders in the long term.
As Larry Fink starts talking about the tokenization of financial assets, and L1 blockchains like Solana continue to seek product-market fit and explore new utility and innovation, it’s not too far-fetched to imagine Jupiter could accommodate a variety of new asset classes over time.
