Jupiter Initiates First JUP Buyback Worth $3.33M

Jupiter has officially launched its first-ever JUP token buyback, repurchasing 4.88 million JUP tokens, valued at approximately $3.33 million. This buyback, reported on February 26, marks the beginning of Jupiter’s broader strategy to enhance the value of its tokens and drive buying pressure. The buyback was first flagged by on-chain analyst AI姨, who identified Jupiter’s Litterbox address, which is used for all buyback transactions.

The buyback is part of a larger plan, announced on February 13, where Jupiter intends to allocate 50% of its protocol fees for the ongoing repurchase of JUP tokens. Once repurchased, the tokens will be locked for a period of three years, thereby reducing the overall supply and potentially boosting demand. This move has been welcomed by the cryptocurrency community, as it is seen as a positive step toward preventing JUP from becoming a “value trap” — a scenario where the token’s value stagnates due to an oversupply.

Jupiter’s buyback initiative is expected to be a significant one, with the protocol projected to spend around $50 million on JUP buybacks in 2024, based on its estimated $102 million in revenue for the year. This represents about 2.7% of JUP’s market capitalization of $1.8 billion. The initiative is designed to reduce the circulating supply of JUP tokens, which could help increase their value over time.

As of now, Jupiter remains the top DEX aggregator on the Solana blockchain. It generates revenue by directing trades across multiple decentralized exchanges (DEXs) such as Raydium and Orca, ensuring that traders receive the best exchange rates. Jupiter has seen significant revenue growth, partly due to the memecoin trading frenzy that took place on Solana in the past year.

Another major contributor to Jupiter’s success has been the Jupiter Perps platform, which dominates Solana’s perpetual decentralized exchange market, accounting for more than 80% of the market share. Jupiter’s revenue surged dramatically in 2024, rising from $3 million in January to $21 million by December. $35.86 million, or nearly 40% of Jupiter’s total revenue for the year, came from fees generated during periods of high trading activity, such as the spike in TRUMP memecoin trading.

This buyback strategy aligns with broader trends in the DeFi space, where projects like Aave and Ethena are also exploring methods to increase token value and align the interests of tokenholders with the protocol’s growth. While the long-term effects of these buybacks are still to be seen, Jupiter’s move represents an increasing emphasis on ensuring that token value is directly tied to the success and expansion of the protocol itself.