Jupiter

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Discover Jupiter's fundamentals and latest news.

This content was generated by Whalee (BETA), an AI crypto assitant that analyses cryptocurrencies. Informations can be incomplete and/or erroneous. Please always double check and DYOR.

What is Jupiter?

Jupiter (JUP) is a decentralized finance (DeFi) platform on the Solana blockchain that functions as a liquidity aggregator, streamlining and optimizing trading activities within the DeFi space. It pools resources from various sources to facilitate smoother and more efficient token swaps, perpetual futures, and decentralized stablecoins. The JUP token serves as a governance token, allowing holders to participate in decision-making processes that guide the platform's development and operation.

How is Jupiter used?

Jupiter (JUP) is the native governance token for the Jupiter Aggregator, a decentralized exchange (DEX) aggregator built on the Solana blockchain. The JUP token empowers community members with the authority to approve, sanction, and cast votes on all present and future decisions related to the Jupiter ecosystem and platform. This includes determining emission plans, suggesting improvements to the Jupiter protocol, influencing upcoming launchpad initiatives, and overseeing the allocation of ecosystem grants.

How do I store Jupiter?

To store Jupiter (JUP) tokens, you can use a hardware or non-custodial software wallet. Many investors prefer non-custodial software wallets for storing and trading JUP tokens. For instance, you can use Phantom Wallet, which is easy to connect to a Ledger cold storage device. This ensures the security of your tokens by keeping them offline.

How to buy Jupiter?

To buy Jupiter (JUP) tokens, follow these steps:

  1. Create an Account:

    • Register on a cryptocurrency exchange that supports JUP trading, such as KuCoin, Binance, CoinEx, Kraken, OKX, Bybit, gate.io, or MEXC.
    • Verify your account and secure it with the necessary personal information and KYC (Know Your Customer) requirements.
  2. Fund Your Account:

    • Deposit funds into your exchange account using a payment method accepted by the exchange.
  3. Select JUP Trading Pair:

  • Choose the JUP trading pair you want to use, such as JUP/USDT or JUP/BTC.
  1. Place a Buy Order:

    • Decide whether to use a Market Order or a Limit Order:
      • Market Order: Execute the trade at the current market price.
      • Limit Order: Specify the maximum price you are willing to pay for JUP tokens.
  2. Complete the Trade:

    • Review and confirm your order details before submitting it.
    • Once the order is executed, your JUP tokens will be added to your exchange wallet.

Additionally, you can also use decentralized exchanges (DEX) like Uniswap or SushiSwap, but the process may vary depending on the DEX and the blockchain it operates on.

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History of Jupiter

The history of Jupiter (JUP) began in October 2021 when it was launched by a pseudonymous developer known as "Meow." Jupiter is a decentralized exchange (DEX) aggregator built on the Solana network, aiming to optimize token swaps by aggregating liquidity from multiple DEXs. This approach helps mitigate the issue of fragmented liquidity in the DeFi sector, which can lead to inefficient markets and high volatility.

Initially, Jupiter focused on building best-in-class swap infrastructure, aiming to become Solana's default swap provider. Over time, the project expanded to include additional features such as a perpetuals exchange and plans for a yield-bearing stablecoin called SUSD. SUSD is designed to be a decentralized alternative to stablecoins like USDC and USDT, backed by Solana liquid staking tokens (LSTs) and offering interest-free loans.

In January 2024, Jupiter conducted one of the largest airdrops in crypto history, distributing 1.35 billion JUP tokens to nearly one million wallets. This airdrop was part of a larger plan to distribute 40% of the total 10 billion JUP tokens to the community. The remaining 50% is reserved for team and operational needs, with a vesting period for team allocations.

Since its launch, Jupiter has grown to become a leading DeFi protocol on Solana, processing significant transaction volumes. In November 2023, it handled $3.7 billion in transactions, rivaling other major DeFi protocols like Uniswap and 1inch.

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How Jupiter works

Jupiter (JUP) is a decentralized exchange (DEX) aggregator that operates on the Solana blockchain. It aggregates liquidity from multiple DEXs, including automated market makers (AMMs) and order book DEXs, to provide users with the best available prices for token swaps. This approach helps to overcome the issue of fragmented liquidity in the DeFi sector, which can lead to inefficient markets, high volatility, and risks of slippage.

Key Features
  1. DEX Aggregator: Jupiter pools liquidity from various DEXs, ensuring that users can access the best prices for token swaps. This is similar to how a broker in traditional markets sources optimal trades from multiple exchanges.

  2. Governance Token: The JUP token is used for governance within the Jupiter ecosystem. Holders of JUP tokens have a say in decision-making processes, including voting on proposals related to platform functionality, updates, and other critical aspects.

  3. Dollar Cost Averaging (DCA): Jupiter offers a DCA feature that allows users to automate buying and selling of SPL tokens at regular intervals. This helps to average out purchase prices and combat price spikes.

  1. Bridge: The platform includes a bridging protocol that enables users to bring assets from other networks into the Solana ecosystem. This feature is particularly useful for migrating assets from other exchanges into Solana.

  2. Wrapped SOL: Jupiter uses wrapped SOL, which is created by locking native SOL into a smart contract and issuing a representing asset on the new network. This improves liquidity and integrations across the industry.

How It Works
  1. Keepers: Network nodes called Keepers are responsible for completing tasks within the community. They secure rewards for their efforts, including providing price data from various sources.

  2. Slippage Prevention: Jupiter's unique structure eliminates slippage by using Keeper nodes to fulfill orders. This ensures that orders are never failed due to slippage.

  3. Low Fees: Jupiter does not charge transaction fees for regular AMM trades. The only fee is the gas on the Solana blockchain, making it a cost-effective option for high-volume traders.

  1. Privacy: Jupiter maintains the open nature of DeFi by not requiring users to complete Know-Your-Customer (KYC) and Anti-Money Laundering (AML) requirements, ensuring user privacy.
Tokenomics
  • Total Supply: The total supply of JUP tokens is capped at 10 billion, with 50% allocated for distribution to the Jupiter community through airdrops and other initiatives, and the remaining 50% reserved for team and operational needs.

  • Airdrop: The JUP airdrop is a significant event in the token's distribution strategy, aiming to decentralize token ownership, reward early adopters and active users, and attract new users to the platform.

Conclusion

Jupiter is a decentralized exchange aggregator that leverages the speed and security of the Solana blockchain to provide users with optimized token swaps. Its features, such as DCA, bridging, and low fees, make it a popular choice in the DeFi sector. The JUP token plays a crucial role in governance and incentivizes holding and using the token within the platform, contributing to its liquidity.

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Jupiter's strengths

Jupiter (JUP) has several strengths that make it a popular and effective platform in the Solana ecosystem:

  1. Efficient Liquidity Aggregation: Jupiter aggregates liquidity from multiple decentralized exchanges (DEXs), ensuring that users can access the best possible trading prices for token swaps, perpetual futures, and decentralized stablecoins.

  2. User-Friendly Interface: The platform is known for its simplicity and ease of use, making it accessible to a wide range of users. It also offers features like Dollar Cost Averaging (DCA) and limit orders, which enhance the trading experience.

  3. Governance Token: The JUP token serves as a governance token, allowing holders to participate in decision-making processes and vote on proposals related to the platform's development and operation.

  1. Perpetual Futures Trading: Jupiter offers GMX-style perpetual futures trading, which expands its offerings beyond token swaps and enhances its appeal to users.

  2. Decentralized Stablecoin: The platform is planning to launch its own decentralized stablecoin, addressing the custodial and regulatory risks associated with more centralized stablecoins like USDC and USDT.

  3. Strong Community Support: Jupiter has a dedicated community, with a significant airdrop event in January 2024 that distributed 1 billion JUP tokens to early adopters and active users.

These strengths have contributed to Jupiter's growth and popularity within the Solana ecosystem, making it a significant player in the DeFi sector.

Jupiter's risks

Jupiter (JUP) carries several risks, primarily related to its decentralized nature and the broader cryptocurrency market. Key risks include:

  1. Regulatory Risks: As a decentralized platform, Jupiter is vulnerable to regulatory changes and potential crackdowns on DeFi protocols. This could impact its operations and the value of the JUP token.

  2. Custodial Risks: Jupiter's decentralized stablecoin aims to address custodial risks associated with more centralized stablecoins like USDC and USDT. However, the platform itself is not immune to these risks, particularly if users do not properly manage their wallets and private keys.

  3. Market Volatility: Jupiter operates in a highly volatile market, which can lead to significant price fluctuations. This volatility can result in losses for users, especially if they are not experienced traders.

  1. Slippage and Manipulation: As a DEX aggregator, Jupiter is exposed to risks of slippage and manipulation due to fragmented liquidity across different pools. This can lead to inefficient markets and high volatility.

  2. Risk of Airdrop Sell-Off: The large airdrop of JUP tokens could lead to an initial sell-off, potentially causing a drop in token value. This is a common phenomenon seen with many airdrops.

  3. Team and Operational Risks: The team behind Jupiter holds a significant portion of the tokens, which could lead to centralization and manipulation concerns. Additionally, operational risks such as technical issues or security breaches can impact the platform's performance and user trust.

  1. Competition: Jupiter operates in a competitive DeFi space, where other platforms like Uniswap are already established. This competition can make it challenging for Jupiter to maintain its market share and attract new users.

  2. Risk/Reward Score: Jupiter has been given a medium risk rating by InvestorsObserver, indicating that it is a moderate risk investment. This rating is based on factors such as recent changes in volume and market cap, which can affect the token's price and liquidity.

Overall, Jupiter's risks are a mix of platform-specific issues and broader market concerns. Users should carefully evaluate these risks before investing in or using the platform.

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Did Jupiter raise funds?

Yes, Jupiter (JUP) did raise funds. The Jupiter airdrop drew criticism, with some users concerned that the team was using the open market opportunity to raise funds without users being fully aware of this intention. The Jupiter team outlined a comprehensive strategy that included a governance model and ecosystem initiatives, but critics argued that the method of offering JUP on the open market resembled a capital-raising strategy.

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Jupiter’s team

  • Meow: Founder of Jupiter Exchange, known for addressing community concerns and clarifying token sale strategies on platforms like X.
  • 0xSoju: Member of the Jupiter team, active on Twitter.

Whalee AI

The fundamental analysis assistant for crypto value investors.

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