Jupiter Boosts JUP Demand with $100M Annual Buyback

Jupiter Exchange, a decentralized exchange (DEX) aggregator built on the Solana blockchain, has announced a significant move to boost demand for its native token, JUP. The platform plans to allocate 50% of its protocol fees to buy back JUP tokens, with the purchased tokens being locked for three years. This decision is projected to result in an annual buyback of over $100 million, creating a steady source of demand for the token.

Crypto researcher Aylosaid, in an X post, praised the move, stating that the consistent buy pressure would have a positive effect on the token's price. The researcher also noted that Jupiter still has enormous growth potential, making it an attractive investment opportunity.

Jupiter's decision to buy back its tokens comes amidst a surge in trading volumes on the platform. As of Feb. 14, Jupiter was the most popular DEX aggregator, with around $3.2 billion in daily volume, according to DefiLlama. The platform has earned roughly $6 million in fees since its inception, with its success largely driven by increased memecoin activity on the Solana blockchain.

The buyback announcement is part of a broader trend in the decentralized finance (DeFi) sector, where protocols are under increasing pressure to provide tokenholders with a share of protocol revenues. Following Donald Trump's win in the US presidential election, which signaled a friendlier regulatory environment for DeFi protocols, several projects have piloted value-accrual mechanisms for their native tokens.

For instance, Ethena, a yield-bearing stablecoin issuer, agreed to share a portion of its roughly $200 million in protocol revenues with tokenholders. Similarly, liquid restaking token (LRT) issuer Ether.fi proposed allocating 5% of protocol revenues to buy back native ETHFI tokens and distribute them to stakers. Maple Finance also announced plans to use protocol revenues to distribute rewards to stakers.

Jupiter's buyback program is expected to have a positive impact on the JUP token's price and demand, while also aligning the interests of tokenholders with the platform's success. As the most popular DEX aggregator on the Solana blockchain, Jupiter's move could set a precedent for other DEXs and DeFi protocols looking to create a steady source of demand for their native tokens.