Proposal: Addressing Jupiter’s Inflationary Tokenomics and Restoring Investor Confidence
As seen in the attached data, Jupiter has been the most underperforming coin on the Solana network over the past 7 and even 30 days. The reasons for this are clear:
Inflationary Tokenomics: The token has an inherently inflationary structure.
High FDV Risk: Jupiter carries the risk of an extremely high Fully Diluted Valuation.
Planned Airdrops Increasing Supply: If approved, the supply will significantly increase over the next two years due to large airdrops.
These issues are driving investors away from Jupiter. To address this, I propose the following changes:
Proposed Changes:
Cancel ASR Rewards: Stop distributing ASR rewards, which contribute to token inflation.
Cancel Jupuary: Discontinue plans for Jupuary and its associated airdrops.
Burn All JUP-Based Rewards: Permanently burn all JUP tokens allocated for rewards to reduce the supply and the FDV.
Introduce a Buyback & Burn Mechanism:
Even if Jupiter currently doesn’t collect fees from swaps, it generates income through mechanisms like VA & DCA.
Allocate a percentage of this revenue to purchase and burn Jupiter tokens.
Establish a monthly burn mechanism to consistently reduce the supply.
Rationale:
Even PancakeSwap, the oldest DeFi dinosaur, has become deflationary after years of operation by burning tokens every month. Jupiter, as the premier token of Solana, deserves to be the most valuable asset on the network. It should claim its rightful place by addressing its inflationary tokenomics.
Conclusion:
Say NO to all inflationary JUP rewards. Jupiter should focus on reducing its supply and strengthening its value proposition to become Solana’s most prized asset.
Your proposal brings up some valid concerns, but it seems to focus heavily on addressing short-term price performance rather than fostering long-term value creation. While a quick price boost might appeal to some, Jupiter’s true strength lies in its underlying value and potential, which surpasses many projects with higher token prices, inflated FDVs or even greater token inflation.
Here are a few points to consider:
Inflationary Tokenomics Perspective: While Jupiter may have an inflationary token model, this isn’t inherently bad if managed well. Inflation can incentivise ecosystem participation, liquidity, and user growth. Simply reducing inflation without a plan for enhancing utility and adoption could risk undermining the protocol’s ability to scale and attract users. Projects with higher prices but poor utility or engagement often lack sustainable growth.
FDV Concerns in Context: FDV is only meaningful when viewed in conjunction with actual utility and market adoption. Jupiter has significant intrinsic value and utility compared to other projects with higher FDVs but lower real-world activity or innovation. Addressing perceived FDV “risk” without recognising the unique strengths Jupiter offers would be shortsighted.
Airdrop Supply Increase: While it’s true that airdrops can increase supply, they also represent an opportunity to expand the community, improve distribution, and drive engagement. Blanket opposition to supply increases ignores the long-term benefits these initiatives could yield if they’re tied to adoption goals or incentivise meaningful contributions to the ecosystem.
Instead of focusing on short-term fixes to improve price performance, the emphasis should be on leveraging Jupiter’s strong fundamentals; its value proposition, utility, and competitive advantages within the Solana ecosystem. Building on these strengths can organically drive sustainable growth, attract long-term investors, and ultimately lead to better price performance without compromising the project’s vision.
While your proposal highlights issues that could temporarily drive investors away, prioritising short-term fixes risks neglecting the long-term potential that truly sets Jupiter apart.
JUP is only a 1-year old token and it is already at $1,473,411,654 ($1.47 Billion) market cap with CMC rank #63. There is NOTHING underperforming about that
In regards to your idea about interdicting a buy-back and burn mechanism:
I am the developer of 3 hyper-deflationary tokens on Solana with 1% - 3% of trading volume being burned. With one token we burned 30% of the total supply after just 7 month of operations, so I’m a big believer in (hyper)deflationary economics / tokenomics.
Point 4 ‘‘Introduce a Buyback & Burn Mechanism’’ is a great idea in my opinion and should easily be able to be implemented.
Jupiter is in a unique postion to add a buy-back and burn fee on all swap volume.
With $340 Billion in trading volume and a 0.1% fee you’d be burning $340 Million worth of JUP tokens per year.
Proposed changes 1 - 2 go directly against the goal of community growth and engagement. It goes against what most of the Jupiter team and community strongly supports. ASR and Jupuary were introduced on purpose and should remain.
I would even go as far as to say that Jupuary round #1 has been a big contributer to JUP reaching a $1,473,411,654 ($1.47 Billion) and a CMC market cap rank of #63.
Propose change 3 has already been done through a 30% token supply burn which will take place this January at the Jupiter Catstanbul conference. The main problem with this suggestion is that the tokens were allocated towards community distribution. There’s no point in burning more tokens which have had a clear and specific purpose from day one.
Most people suddenly seem strongly set against ASR and jupuarys.
These were all very well received and welcomed concepts at Jup inception.
If both have been included in Jupiter plans since the genesis, and were not branded negative at first jupuary,
it doesnt make sense to keep inventing the fud swirling around both concepts now.
This is not about, “How can we make the token more exclusive and hence more valuable”. It’s about how can we make it more inclusive and form a community large enough to support a paradigm shifting Global Unified Market (GUM).
JUP needs financial incentives to exist. That´s the basic principle about Stocks and dividends or increase of Market Value of REITs and the distribuitions.
It´s DeFi, not nonsense accumulation of tokens.
I’d keep the ASR, as it encourages participation in the direction of the platform.
Jupuary, I’d knock that on the head, it not only heavily dilutes the value of the bags of the believers, it also doesn’t bring in new users, as the recpients of the airdrop are already using the platform.
Those who are serious about Jupiter already own tokens, ppl have had nearly a year to buy in.
The smart money is the whales who have already unstaked, selling after unstaking period, waiting to see what happens, possibly buying back in late January, early February if the airdrop is approved and after the token price has dropped by between 30 to 50%.
direction which direction its no more formal? majority wants criteria forehand to decide if that adds additional incentive and to perform accordingly, thats what meow too realized and saying from long time, both incentive works proportionately. you cant believe if someone is a new emerging user unless if you belong to the same list, or maybe take a peak inside discord gen chat to know how it works.
And to be Honest JUP has the Most transparent and even keeled Token Price chart - Extremely stable.
I don’t think you are here for the Community, I may be wrong - You should read up and get involved in the many things going on in the JUPIVERSE and I know 100% your Mood / Mind will change.
He is totally forgetting that the number of staked tokens has Increased MoM - and This is a huge contributor to Price stability and Increase as Locked and Voting JUP tokens cannot be sold.
A Very Green Post I must Say!
Totally uneducated and based off Fiction.
~365 days ago i started, why should we grap the bags and go home. remember Bitcoin for example takes 14 years from 0,04 to nearly 100k. 14 years. why we schould end this great transparent, very well running Project after ~365 days?
Answering to your point 2. The biggest mistake people make is never selling. There are more than 100 000 failed dead projects and only a handful among BTC which has been widely adopted after many years.
You will understand when you go through your first market cycle at the latest.
Founders and teams think long term, unless they are scams. Community can believe in the long term vision and can support long term, but buying an altcoin with 5-10 year investing horizon is pretty bad deal considering that +99% of altcoins will fail within the first 5 years.
I’m wondering if the “Burn” Was the Right thing to do, I had Voted YES - But now think WE NEED MORE TOKENS TO ONBOARD MORE STAKERS & VOTERS.
Look at SOL its inflationary and has great Price action, The thought of deflationary being better is a myth as a real economy needs BOTH. ~ Anatoly Yakovenko
His view even though is his own is Fanatical. I mean literally like saying Shut down JUPITER operations. Clearly there is much education that needs to be spread about JUP…
jupuary is like another holiday season if only team keeps up with the culture