Jupiter Becomes Top-performing DEX Token: $JUP Rises 166% in a Month

KEY TAKEAWAYS

  • Jupiter DAO was funded with cryptos worth over $186 million to support its ecosystem and community.
  • Jupiter DAO will incentivize governance voting through a rewards system.
  • JUP holders voted to launch two Solana-based projects in March 2024. Jupiter DAO will fund independent groups called JWGs to grow the Jupiter community and Solana ecosystem.
  • Solana-based DEXs Jupiter and Raydium were the top DEXs in terms of trade volume across all networks at the time of writing.

Solana-based (SOL) decentralized exchange (DEX) aggregator Jupiter’s JUP token is currently the top-performing DEX token across all blockchain networks over the past 30 days, as of April 2, 2024.

In the period, JUP has surged over 166%, outperforming Solana-based rival Raydium’s (RAY) 72% rise and Optimism-based Velodrome Finance’s (VELO) 157% jump.

In this article, we talk about the latest developments in Jupiter and analyze JUP’s price movement.

The Rise of Jupiter: Jupiter DAO, Incentivized Voting

Since launching its native token called JUP on January 31, 2024, Jupiter has seen key developments, including the formation of a decentralized autonomous organization (DAO) and the community’s first governance proposal.

1. Jupiter Creates DAO

Jupiter was quick to establish the Jupiter DAO following its token launch to support its ecosystem and community. On March 27, 2024, Jupiter announced that its DAO wallet had been officially funded with 10 million USDC tokens and 100 million JUP tokens, collectively worth over $186 million at the time of writing.

Jupiter said the platform will aim to “top up the same budget on a yearly basis” and added that the funds will be used to fund ecosystem projects, public goods, community efforts, and voting incentives.

JUP token holders need to stake their tokens to participate in governance proposals. JUP holders will also hold the power to vote for token launches on the platform.

2. Jupiter Incentivizes Voting Activity with Token Rewards

Jupiter announced that it will introduce a reward system called ‘active staking rewards’ to boost voter turnout at its governance proposals.

Jupiter DAO currently holds 100 million JUP tokens in its treasury which will be distributed over the next six months to voters.

Jupiter added that tokens that launch through Jupiter’s launchpad will pay 0.75% of their total supply to the Jupiter DAO, which will be used as active staking rewards.

The first batch of active staking rewards is expected to be distributed in July 2024.

3. Jupiter DAO Conducts First Token Launchpad Vote

In March 2024, Jupiter DAO conducted its first token launchpad vote to list two new Solana-based tokens.

There were six candidates up for vote in Jupiter’s inaugural LFG Launchpad vote. Over 175,000 voters participated in selecting Solana-to-Bitcoin communication layer Zeus Network (ZEUS) and NFT lending protocol Sharky (SHARK).

4. Jupiter Working Groups

In early March 2024, Jupiter announced that Jupiter DAO will fund Jupiter Working Groups (JWGs) which are independent groups that focus on ”growing the Jupiter community, enhancing the Solana ecosystem, and facilitating DAO coordination.”

On March 29, 2024, the DAO proposed a vote to fund its first JWGs that comprised four Jupiter and Solana community members – C2yptic, Slorg, Kemosabe, and Durden.

The proposal was met with criticism from some community members for proposing to allocate 4.5 million JUP tokens to cover a $450,000 expense budget, $320,000 per year compensation to the four members, $30K per year moderator compensation, and $100K for miscellaneous expenses.

The proposal reads: “The $JUP allocation for long-term incentive alignment is analogous to RSUs (Restricted Stock Units), which are a common practice in the business world. RSUs are equity compensation where an employer grants shares to employees, subject to conditions like vesting.

“Upon vesting, employees receive shares or cash, aligning incentives with company performance over the long run.”

The proposal received the approval of Jupiter’s community and was passed on April 1, 2024.

JUP Price Analysis: Jupiter Rises to the Top

JUP’s rise to become the top-performing DEX token across all blockchains over the last 30 days, as of April 1, 2024, comes as no surprise as positive governance developments and the introduction of an attractive voting rewards scheme have combined with a booming Solana crypto market to boost the prospects of the DEX token.

Solana-based Jupiter and Raydium have consistently outperformed rival DEXs, including leading Ethereum DEX Uniswap v3, BNB Chain-based PancakeSwap, and dYdX v4 in terms of trade volume since the start of the year.

As of April 1, 2024, CoinMarketCap data showed Raydium and Jupiter were the top DEXs across all blockchains, with a 24-hour trade volume of about $1.3 million each. Uniswap v3 stood third, boasting over $890 million, and Solana-based Orca followed with about $820 million in 24-hour trade volume.

Jupiter’s growing popularity has helped the JUP token amass a market cap of over $2.2 billion, making it the 58th largest cryptocurrency in the world as of April 2, 2024.

When asked if there was a reason to think whether a Solana-based DEX could be bigger than Ethereum’s Uniswap. The DeFi Report wrote:

“Solana is more performant and less complex from a user experience today. However, there is a rather large elephant in the room: Jupiter. Jupiter, a DEX aggregator (and more), owns the relationship with users on Solana today.”

Michael Nadeau, for The DeFi Report, added: “The market is putting a premium on where the user interfaces (we agree with this). Therefore, the most relevant comp to Uniswap on Solana is Jupiter, in our opinion.”

The Bottom Line

Jupiter is one of the leading decentralized finance (DeFi) protocols on the Solana blockchain.

The Solana ecosystem has risen like a phoenix in the bull market of 2023-2024. Many had written off the Layer One (L1) blockchain due to its close affiliation with Sam Bankman-Fried and the now-defunct FTX Exchange.

But in the cosmos of crypto, the conjunction of Solana and Jupiter keeps on ascending.

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