The initial JUP token buyback by Jupiter has commenced, as confirmed by on-chain records showing that approximately 4.88 million JUP tokens valued at around $3.33 million have already been retrieved.
On February 26th, it was reported by well-known on-chain analyst AI Aunt that Jupiter’s (JUP) Litterbox address, used for all buyback transactions, was involved in a buyback operation. This buyback marks the initial phase of Jupiter’s broader plan to acquire JUP tokens, using 50% of their protocol fees.
On February 13, the buyback program was announced with the aim of decreasing the amount of tokens in circulation by securing repurchased tokens for a period of three years. This action is expected to create persistent buying interest. The cryptocurrency community has expressed approval, considering it beneficial as it is likely to increase demand and hinder JUP from becoming a “trap for value.
This year, it’s expected that Jupiter will allocate approximately $50 million towards repurchasing its own shares, given its projected revenue of $102 million by 2024. This amount equates to around 2.7% of their total market value, which currently stands at a staggering $1.8 billion.
Jupiter has consistently been the leading Decentralized Exchange (DEX) aggregator for Solana. Its system collects fees by routing trades across multiple DEX platforms, like Raydium and Orca, and guarantees optimal exchange rates for traders. Over the past year, a surge in memecoin trading activity on Solana has contributed to a substantial growth in Jupiter’s earnings.
The Jupiter Perps trading platform, accounting for more than 80% of Solana’s decentralized exchange market for perpetuals, has played a significant role in Jupiter’s financial growth. In the year 2024, revenue experienced a substantial surge, rising from $3 million in January to $21 million in December, as reported by on-chain analyst AI姨.
Approximately 40% of Jupiter’s annual earnings, amounting to $35.86 million, were generated by fees charged during substantial trading times, such as the surge in trading for the TRUMP memecoin.
Jupiter’s buyback strategy aligns with a broader DeFi trend where platforms like Aave (AAVE) and Ethna (ENA) are adopting strategies to accumulate token value. While the long-term implications are still uncertain, this buyback initiative underscores a growing focus on linking token holders’ interests with the growth of the protocol.
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2025-02-26 12:52