A Brief Analysis of the Jupiter Second Token Disposal Proposal: Where Will the $190 Million JUP Go?
JUP staking users are expected to continue receiving a 55% "minimum" return for another year.Author: Azuma, Odaily Planet Daily
The largest decentralized exchange on Solana, Jupiter, is advancing its second major vote regarding the disposal of its token JUP (J4J #2). The voting results will directly determine the fate of approximately 215 million JUP (around $190 million).
Earlier this August, the Jupiter community passed its first major vote on JUP disposal (J4J #1) with a 95% approval rate, which decided to burn 3 billion JUP (30% of the total supply) to reduce Jupiter's maximum supply.
According to the planning mentioned by Jupiter founder meow, Jupiter plans to initiate three votes named J4J for JUP disposal to address the excessively high FDV issue, establish optimal transparency in token distribution, and allow the community to vote on potential JUP issuance.
The current proposal is the second of these three important votes, namely J4J #2.
The background of this proposal is that Jupiter executed an airdrop event called Jupuary earlier this year. Due to the airdrop not being fully claimed, approximately 215 million (215,461,850.21) JUP remain. At the current market price of about $0.88, the total value of this portion of JUP amounts to $190 million, which is a significant asset for any protocol.
Last night, Jupiter founder meow initiated a governance draft on the governance forum regarding how to dispose of these 215 million JUP. The draft mentioned three disposal options:
- Use the tokens for the Active Staking Rewards (ASR) program for the next year;
- Burn the tokens;
- Return the tokens to the community multi-signature wallet.
meow mentioned that the Jupiter team currently prefers the first option, as ASR has successfully proven in the past few months to drive community participation in every proposal, discussion, and vote, so investing funds into ASR can help the Jupiter community continue to grow.
In the following text, we will briefly summarize the specific scale of ASR and calculate the reward increase effect of the above options on the existing ASR program.
ASR, directly translated, means "Active Staking Rewards." ASR is a staking and governance reward mechanism designed by Jupiter to reward community members who stake JUP and actively participate in governance, voting, and discussions, encouraging them to engage more deeply in the Jupiter ecosystem.
The rewards for ASR mainly come from two parts: one is 0.75% of the LFG Launchpad fees (this part comes from specific LFG issuance projects, so it will consist of various tokens), and the other part comes from the treasury's initial allocation of 100 million JUP.
In early July this year, Jupiter distributed the first round of ASR rewards, granting a total of 50 million JUP to all community users who voted on proposals between March and June this year. Currently, the ASR program still has 50 million JUP remaining and plans to start distributing it in October to community users who voted on all proposals between July 1 and September 30.
Looking at the performance of the past two quarters, ASR has played a significant role in incentivizing community activity.
As of meow's post, a total of 585,000 addresses have staked 361 million JUP; after 12 votes since the program's launch, an average of 280 million JUP participated in each vote; and there have been numerous discussions and suggestions visible on the governance pages for each vote.
Therefore, with the idea of maintaining ASR incentives, meow and the Jupiter team suggest continuing to use the aforementioned 215 million JUP for ASR incentives for the next year, releasing an average of 50 million each quarter, while the remaining surplus of 15 million will be temporarily returned to the treasury for future specific needs.
Based on the current ASR staking scale, a static calculation shows that injecting 200 million JUP into the ASR incentive pool means that 361 million JUP staked users can enjoy a guaranteed return of 55% over the next year—excluding other earnings from the 0.75% LFG Launchpad fees.
Clearly, this option is sufficient to continue ensuring the attractiveness of the ASR program, thereby maintaining the community's willingness to participate in the development of the Jupiter protocol.
It is precisely for this reason that meow and other members of the Jupiter team openly support this option and call on the community to vote accordingly.
However, this does not mean that this option will definitely pass. Among the other potential options listed by meow, the "direct burn" option is also seen by some community members as more aligned with the interests of all JUP holders, rather than just those who stake. However, considering that the users participating in the vote are all stakers directly linked to ASR incentives, the probability of the first option passing remains higher.
According to the current timeline, the voting for this proposal will start at 15:30 UTC on September 27 (23:30 Beijing time), and Odaily Planet Daily will continue to monitor the situation.
