$JUP Buybacks to Begin Feb 17 - How Does it Compare to Other Solana Projects?

A few short weeks after announcing token buybacks at Catsanbul, Jupiter is finally ready to start acquiring $JUP directly off the open market and locking it away for three years.

Estimated to purchase and remove over $400k worth of $JUP from the market every day, Jupiter’s new buyback mechanism is expected to catalyst dramatic price appreciation for the asset.

How exactly will $JUP buybacks work, and how will it compare to other buyback mechanisms in the Solana ecosystem?

Jupiter Buybacks Start Feb 17

Since Jupiter’s initial TGE (Token Generation Event) in 2024, $JUP was merely a governance token enabling stakers to increase their holdings. Now, to the delight of $JUP investors across the Solana ecosystem, Jupiter is finally driving sustainable value accrual to its native token.

As promised during its Catsanbul event, 50% of all revenue generated from Jupiter’s expansive product suite will be used to purchase $JUP off the open market. To give holders greater peace of mind, all $JUP acquired by Jupiter’s buyback mechanism will be locked for 3 years in the protocol’s litter box.

Ever a true advocate for transparency, Jupiter co-founder Siong Ong shared further details surrounding how Jupiter's buyback mechanism would operate. 

Revenue collected from all Jupiter’s products will flow to a public wallet. 50% of all funds collected in this wallet will be used to purchase $JUP off the open market via Jupiter products on a hourly basis, then transferred to the Litterbox multisig. The remaining funds will be swapped to $SOL or $USDC and transferred to the Jupiter team treasury multisig and used for further growth initiatives.

According to Ong, Jupiter will create a Dune Analytics dashboard giving the public a clear and verifiable way of tracking the buyback program.

$JUP vs Other Buybacks

From Monday, Jupiter joins several other Solana ecosystem protocols that leverage buybacks to drive sustainable value accrual to their native tokens. 

Both Solana’s premier decentralized exchange, Raydium, and ecosystem conglomerate Step Finance boast powerful buybacks to indirectly reward token holders.

According to a recent SolanaFloor study, Jupiter’s buyback mechanism is expected to allocate around $437,000 per day to $JUP buybacks. This figure is reinforced by Siong’s estimation, which predicts anywhere between $250k-$500 in daily buybacks.

Raydium data collected over the past 7 days indicates that the protocol spent a daily average of $883,000 of $USDC on $RAY buybacks. Meanwhile, DefiLlama data suggests that Step Finance purchased $708k of $STEP throughout January, with a daily average purchase of $22.8k in $STEP.

Throughout January, Metaplex used 12,000 $SOL worth of protocol fees to buyback 9.2M $MPLX, currently valued at $2.89M, for the Metaplex DAO. Over this time period, Metaplex’s daily average buyback equated to roughly $93,400.

While Jupiter’s mechanism will direct millions in buy pressure toward $JUP, it still lags behind alternative buyback protocols within the Solana ecosystem in terms of its impact on the project’s market valuation.

Disclaimer: SolanaFloor is owned and operated by Step Finance

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