Best Solana SOL Altcoin JUPITER ($JUP) in BIG Trouble?

After this weekend’s mega-rug pull from the $LIBRA memecoin where even Argentina’s President Javier Millei was involved, it leaves us with a question. Is Jupiter a positive or a negative for our industry? Are they an enabler of scams? Or are they just an uncensored platform meaning anyone including good actors and bad actors can list projects there, including scams?

The answer to this big question could decide whether Jupiter and its $JUP token are the best alt to buy on SOL, or if the project is in big trouble. There are positives like their buyback program that launches today. So, let’s take a closer look at Jupiter and see if it’s worth the positive or negative hype they are getting.

The Positive Case for Jupiter

What Is Jupiter?

Jupiter ($JUP) is a DEX aggregator on Solana. An aggregator finds the best exchange rate for you. It’s like the DEX of DEXes. Jupiter uses an innovative routing algorithm to reduce their slippage so you get a better price on your trade.

You may have used Jupiter without even realizing it. If you have a Phantom wallet, and you used it to swap Solana assets, that was Jupiter. It is now one of the largest DEXes on Solana. For example, it outperforms Raydium in both 24 hour volume and market cap. Furthermore, it’s the top DEX aggregator from all chains.

Jupiter is also good to its community. There’s a yearly token airdrop, Jupuary. You can also vote on their DAO proposals. The team involves their community in all major decisions with real, active governance. 

Source: Jupiter DAO site

In case you’re looking to buy $JUP, you can use our friends at BYDFi. So, now Jupiter started a buyback program. Let’s take a look at this.

The Jupiter Buyback Program

Today, Jupiter starts its $JUP buyback program.  Now, Jupiter makes money on the swap fees. It also makes money on fees in its pools and on the perps it offers. For the buyback program, it will use 50% of these fees. It will lock the $JUP it buys back for three years. So, in other words, there’s no sell pressure. See the video below.

This in contrast to airdrop events like Jupuary. For good measure, all $JUP rewards from the ASR program are automatically staked. The unstaking period is 30 days.

Jupiter also had its recent congress, in Istanbul, called Catstanbul. Out of the 10 billion max supply of $JUP, the team burned 3 billion $JUP. However, the price still didn’t improve much. It was still absorbing Jupuary sell pressure. Another factor to consider is that only 2.6 billion tokens circulate. In other words, there are token unlocks coming up. However, the recent burn and the buybacks should mitigate this. 

In the optimistic scenario, the buybacks can lock up 9% of the supply. As already mentioned, this will reduce sell pressure. Also, with a reduced circulating supply, it’s very likely that the $JUP price will increase.

The shift from burning to locking the tokens for three years is also important. It shows a long-term commitment to supply management. Short-term price action plans like burn mechanisms may not last. It lines up its incentives and combines them with sustained platform growth. At the same time, it still has enough liquidity for active trading.

This can easily see the $JUP price change from its current 82 cents to $3 or $4. That’s a 3.5x to 5x. This is not so unrealistic. For example, $BNB’s buyback and burn program helps support its price.

The Case Against Jupiter

Jupiter has a lot of positives going for it, as we’ve seen above. Most Solana tokens can get liquidity to trade using it. And it has good relationships with an active community.

Then this weekend, the $LIBRA debacle happened. A memecoin launch that included,

• Argentina’s President shilling the coin
• And one of the fastest rises, falls, and rug pulls in history.
  

Looking at X, it feels like something has changed. Sniping tokens and insider activity that are often illegal in conventional markets is just part of crypto. We’ve grown to accept it. Yet, something is different about this.

And there is a backlash. That backlash is hitting Solana, Meteora, and Jupiter, all of whom were part of this $LIBRA fiasco.

Now it’s a fair question to ask how involved are they if they just have the tech to enable dishonest, unfair launches?

Someone knew something. Whether it’s Hayden Davis talking about sniping in the X clip below or Kelsier Ventures or others involved in the launch of the $MELANIA coin, someone knew something.

The Backlash is SEVERE

Despite crypto being about personal responsibility for what you buy, sell, hold, and trade, there are many that believe this is one step too far. Many now think at least some protections for users are necessary in the Solana memecoin casino.

Here are just a few of the comments about Jupiter after they tweeted that they did not find any insider advance knowledge on their end.

The last in these group of comments shows the Jupiter team knew a token was coming from this group 2 full weeks ago that would include the Argentine President.

You can see the reactions for yourself. No one believes they did not do anything. You can see from the other comments that this is damaging to the reputations of all 3 projects, maybe most of all to Solana.

The Big Question

There are big legitimate questions here. Is Jupiter an enabler of scams? Or is this just part of real decentralized finance? And Solana, too, for that matter.

We don’t blame gmail or other email providers if we fall for a phishing email scam, do we? Or blame cars or highways for drunk driving accidents?

The arguments for it being part of real, true, decentralized finance are valid. But also, Gmail, carmakers, and local jurisdictions have protections in place to help people using their products and services while Jupiter, Meteora, and Solana have none.

Options to Protect Users

Two simple things they could do to protect users on their platform right away would be:

1. Increase listing fees. When people can list any token, scam or not, for so little, you get token farms creating 50 different tokens a day on pump.fun. That doesn’t help our industry. You will cut back on scam supply of scam tokens if you make the cost of doing business higher. Jupiter should raise its listing fees.
   

Delay pump.fun listings. Most of the almost half million new memecoins per week die in the first 12 hours. If Jupiter waited 48 or 72 hours before listing tokens and providing liquidity, this could cut some of the scam activity too. It would not have helped in the case of $LIBRA, but it could help others. All without having the silly permissions like KYC of conventional finance. KYC would likely not work here either, by the way.

The bottom line is no one wants KYC, stupid rules, middlemen, and rent seekers as we have in conventional finance. That’s why we have crypto and DeFi in the first place. So we can fight against these things.

But something changed with $LIBRA. And if people hold onto this feeling then a couple of safeguards like these 2 above may have to come online to help improve the reputations of Solana, Meteora, and Jupiter.

Net Positive or Net Negative?

Now you’ve seen both cases. The positives include wide access, respect for its community, and its new buyback program. Just these 3 alone put Jupiter ahead of many projects.

And now you’ve seen the negatives, as outlined by the spectacular $LIBRA rug case. Which do you think it is? Is Jupiter a positive or negative for the industry?

And do you think DeFi can and should be 100% permissionless and censorship resistant, so anything goes, including scams? Or do you think we can have that and still have some common sense rules to help lessen the spread of scams? Let us know by commenting on our X account.

Disclaimer

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We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence.

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