Jupiter: The Diversified Development Path of the On-chain Trading Aggregator Leader on Solana

Introduction

Jupiter is a decentralized trading liquidity aggregator on the Solana blockchain. Since its establishment in 2021, Jupiter has gathered over half of the trading volume on the Solana chain, becoming the leader in trading aggregation on the chain. To expand its business scope, Jupiter launched the Launchpad platform Jupiter Start and the incubator Jupiter Labs, aiming for horizontal development by incubating high-quality projects.

Project Basic Information

Basic Information

Website:

Twitter: @JupiterExchange, 420,000 followers

Reddit:r/jupiterexchange

Discord:

White Paper:

Token launch time: 2024

Project Team

Core Team

Meow: Co-founder. Previously created Meteora and R.A.C.C.O.O.O.N.S, co-founder of wBTC, and also one of the founding contributors of the Handshake project.

Ben Chow: Co-founder. He has many years of experience in interaction design and product development, and was a founding team member of the social gaming company Hive7, which received Series A funding from True Ventures and was acquired by Disney/Playdom in 2010. He participated in the design and launch of Hive7’s popular social game Knighthood at the end of 2007.

Consulting Team

Shun Fan Zhou: One of the authors of the Phala Network white paper, PhD from the System Software and Security Laboratory of Fudan University.

Sandro Gorduladze: HASH angel investor and partner. Established a research department at HASH, known for in-depth reports.

Konstantin Shamruk: PhD in Economics from the University of Toulouse, France. Leading the economic design analysis work of Phala Network.

Jonas Gehrlein: Research scientist at the Web3 Foundation, responsible for studying the economic issues of the Polkadot ecosystem.

Zo Meckbach: Polkadot Senior Ambassador, Web3 and cybersecurity researcher and advocate. Currently the COO of MH-IT & Service GmbH.

Financing Situation

The Jupiter team has not disclosed any funding information.

Development strength

Since its inception in 2021, Jupiter has continuously launched innovative features, optimized user experience, and rapidly expanded into other businesses after achieving excellence in the trading aggregator. The project team has demonstrated keen business insight, a proactive spirit, and strong technical development capabilities.

Main Products

Trading Aggregator

Jupiter’s core product is a trading aggregator that consolidates numerous liquidity pools within the Solana ecosystem, automatically searching for and aggregating the optimal liquidity resources through algorithms to provide users with a one-stop best trading path. Jupiter requires a minimum guaranteed liquidity of $500,000 for the trading pairs accessing its pools, which are subject to strict audits. Currently, Jupiter accounts for over 50% of the trading volume on the Solana chain.

Limit Order

Jupiter provides traders with limit order functionality to help avoid increased costs and slippage issues caused by price impact during trading, while also mitigating MEV issues. Jupiter collaborates with Birdeye and TradingView to offer on-chain price data and chart displays, with an interface similar to traditional CEX.

DCA Investment

Jupiter offers DCA investment products, allowing users to set purchase frequency, price range, time period, and cryptocurrency. Once the investment is activated, the system will automatically execute trades and transfer the tokens to the user’s Jupiter account, and after the investment ends, they will be automatically returned to the user’s wallet.

Jupiter Labs

Jupiter Labs is an independent project investment laboratory separate from Jupiter, operating based on community initiatives but supported by Jupiter in terms of technology and funding. Jupiter Labs is committed to the development of perpetual contracts and LST stablecoins.

Perpetual Contract

Jupiter Perpetual adopts an operating model similar to GMX, with participants including liquidity providers and traders. Liquidity providers supply funds to the pool, while traders use the tokens in the pool to establish leveraged positions. Liquidity providers receive 70% of the trading fees and all borrowing fees.

LST stablecoin

XYZ is an LST stablecoin project supported by Jupiter Labs. Users can stake SOL to mint the interest-free stablecoin SUSD. XYZ employs a redemption mechanism to maintain the price stability of SUSD and utilizes leveraged arbitrage strategies to maximize returns.

Jupiter LFG Launchpad

LFG Launchpad adopts an innovative model driven by community and transparency to support new projects. Its advantages include strong community support, customizable anti-bot measures, user-friendly liquidity management tools, and comprehensive trading features.

compared to projects in the same track

Jupiter’s main competitor is 1inch in the Ethereum ecosystem.

Underlying Operating Logic

Jupiter operates on the Solana chain, enjoying the advantages of high performance, especially the parallel processing capability of SVM. 1inch operates on the Ethereum chain, limited by the single-threaded nature of EVM, resulting in weaker processing capability.

Gas fee

Jupiter users only need 0.00015 USD for each transaction, while the average transaction fee on Ethereum is about 0.3 USD. Jupiter is more suitable for high-frequency trading.

Product Diversity

Jupiter offers a variety of product services, including limit orders, DCA investments, and derivatives trading. 1inch primarily focuses on DEX aggregation features.

Future Development Direction

Jupiter focuses on developing Jupiter Labs and LFG Launchpad, expanding into other tracks. 1inch mainly concentrates on the decentralized trading liquidity aggregator business, optimizing trading speed and Gas fees.

Project Model

Business Model

The Jupiter economic model consists of three roles: trading users, liquidity providers, and newly incubated projects. The main sources of income include:

• Liquidity aggregator fees within 2%
• 0.3% fee for limit orders
• DCA investment fee of 0.1%
• Perpetual contract opening and closing fees within 0.1%, exchange fee within 2%, borrowing interest rate and 30% trading fee.
• Launchpad incubation project token allocation

Token Model

The total supply of JUP is 10 billion coins, with 1.35 billion coins currently in circulation, resulting in a circulation rate of 13.5%. The token distribution is as follows:

• 50% allocated to the community
• Each team and community is allocated a cold wallet.
• Initial circulation of 5% for adding liquidity, 10% for airdrop.

Token Empowerment

• Governance Certificate: Participate in DAO Governance
• Liquidity Mining Rewards
• Trading fee discount
• Extended features: Participate in new products and services

JUP Value Assessment

Jupiter does not have mechanisms for token staking, centralized burning, etc. The value of JUP mainly relies on the development of the project itself and user confidence.

Token Price Performance

Since its issuance on January 31, 2024, the price of JUP has increased by more than 2.8 times. The current price is $0.973, with a market capitalization of $1.33057 billion and an FDV of $9.73 billion. The average daily trading volume is approximately $154 million, with a turnover rate of 11.57%.

project risk

The JUP token has relatively simple functions, lacks a staking mechanism, and is not conducive to the increase in token price.

Summary

Jupiter, as a leading decentralized trading liquidity aggregator in the Solana ecosystem, is actively laying out plans in other sectors and is expected to become a unicorn project within the Solana ecosystem. However, its token economics are relatively simple and lack effective value capture mechanisms. Overall, the future development of Jupiter is promising, but the growth of token value may face challenges.