Jupiter Begins JUP Token Buyback

Jupiter has officially launched its first JUP token buyback, repurchasing 4.88 million JUP worth $3.33 million, as confirmed by on-chain data.

The buyback, which took place on February 26, was reported by popular on-chain analyst AI姨 on X. The transactions are managed through Jupiter’s Litterbox address. This initiative marks the beginning of a broader strategy to repurchase JUP tokens using 50% of the protocol’s fees.

Unveiled on February 13, the buyback aims to decrease the circulating supply of tokens by locking repurchased tokens for three years, creating consistent buying pressure. The cryptocurrency community has responded positively, seeing this as a way to enhance demand and prevent JUP from becoming a ‘value trap.’

Jupiter plans to allocate roughly $50 million to JUP buybacks this year, leveraging its projected $102 million revenue in 2024. These buybacks would constitute about 2.7% of JUP’s $1.8 billion market capitalization.

Continuing its status as Solana’s leading DEX aggregator, Jupiter generates fees by optimizing trades across various DEXs, including Raydium and Orca, to ensure the best exchange rates for traders. Over the past year, Jupiter has seen substantial revenue growth driven by the memecoin trading frenzy on Solana.

Another significant growth factor for Jupiter has been its Perps trading platform, which captures over 80% of Solana’s perpetual decentralized exchange market. According to AI姨, revenue surged from $3 million in January to $21 million by December 2024.

Approximately 40% of Jupiter’s total revenue for the year, which amounts to $35.86 million, was derived from fees during noteworthy trading periods, including a surge in TRUMP memecoin trades.

Jupiter’s buyback initiative aligns with a broader trend in DeFi where protocols like Aave (AAVE) and Ethena (ENA) are adopting token value-accrual strategies. Although the long-term impacts remain to be seen, this move reflects an increasing focus on aligning tokenholder value with protocol growth.

Read more: Solana falls 50% from its all-time high as meme coin trading cools.