Decentralized trading platform Jupiter begins JUP token buyback
- Jupiter has started its JUP token buyback, acquiring 4.88 million tokens for $3.33 million
- The buyback will use 50% of protocol fees to lower token supply
- The goal is to enhance JUPs value via supply reduction, aligning with DeFi practices
Jupiter, a leading decentralized exchange (DEX) aggregator on the Solana blockchain, has officially launched its first buyback of JUP tokens.
This marks a significant step in its strategy to enhance token value and stability.
On February 26, 2025, on-chain data revealed that Jupiter repurchased 4.88 million JUP tokens, valued at $3.33 million, using its designated Jupiter Litterbox address for all transactions.
Jupiter(@JupiterExchange) $JUP
17 $0.683 4,885,370 JUP 333 Jupiter: Litterbox
https://t.co/lKWOX27pQa https://t.co/1nfZ1slLsP pic.twitter.com/xkoElpjIfR
Ai (@ai_9684xtpa) February 26, 2025
This initial buyback is the first phase of a broader initiative announced on February 13, 2025. Its aimed at reducing the circulating supply of JUP tokens and creating consistent buying pressure in the market.
50% of fees collected by Jupiter to be used for the buyback
The buyback program allocates 50% of Jupiters protocol fees toward repurchasing JUP tokens. The repurchased tokens are locked for three years, creating a sustained reduction in supply. By doing this, it potentially drives up demand and the tokens market value.
The buyback strategy is underpinned by its robust financial performance in 2024, during which the platform generated $102 million in revenue. Based on this figure, Jupiter will spend approximately $50 million on JUP buybacks throughout 2025. This represents about 2.7% of the tokens current $1.8 billion market capitalization.
This move is designed to lower the number of tokens in circulation, potentially increasing demand and preventing JUP from becoming a value trap. This is a term used to describe tokens that fail to retain or grow in value over time.
The cryptocurrency community has welcomed this initiative, viewing it as a net positive for JUPs long-term prospects.
Notably, the buyback initiative follows a year of impressive revenue growth for Jupiter, driven by its dominance in Solanas decentralized trading ecosystem. As the top DEX aggregator on Solana, Jupiter facilitates trades across multiple DEXs like Raydium and Orca, ensuring traders receive optimal exchange rates.
Additionally, Jupiters Jupiter Perps trading platform has been a key revenue driver. This platform commands over 80% of Solanas perpetual decentralized exchange market.
In 2024, the platforms revenue surged from $3 million in January to $21 million in December. Nearly 40% of its annual revenue$35.86 millioncame from high-volume trading periods, including the surge in TRUMP memecoin activity.
DeFi protocols increasingly adopting token value-accrual mechanisms
Jupiters buyback program aligns with a broader trend in the decentralized finance (DeFi) space, where protocols are adopting token value-accrual mechanisms to strengthen their ecosystems.
Platforms like Aave and Ethena have implemented similar strategies, using protocol revenues to buy back and burn tokens or distribute value to tokenholders.
While the long-term effects of Jupiters initiative remain to be seen, it reflects an industry-wide shift toward prioritizing token utility and stability, ensuring that the interests of token holders and platform growth are closely aligned.
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