Jupiter Proposes to Burn $2.8B Worth of JUP in Rare Move

Jupiter’s co-founder, Meow, has proposed a major change to JUP’s tokenomics, the cryptocurrency behind the Solana-based decentralized exchange aggregator. The plan includes cutting the total JUP supply by 30%, reducing the team’s share, and lowering emissions.

This proposal is the first of three planned votes to improve certainty, alignment, and transparency (CAT) for JUP holders and the community. The main goal is to cut the token supply from 10 billion to 7 billion.

Jupiter Tokenomics Adjustment

The reduction will happen through several steps. First, the team will voluntarily cut 30% from their own allocation to show their commitment to the project’s long-term success.

Next, they will reduce Jupuary emissions by 30% to keep the token economy balanced. The rest of the reductions will come from previously assigned allocations, including those for liquidity providers and strategic reserves.

These actions aim to strengthen and enhance the value of the token ecosystem for all stakeholders. According to Meow, following the 50/50 principle, where the team and community each manage 50% of the tokens, they will burn 1.5 billion tokens worth $2.8 billion from both portions.

Community Engagement

The initial JUP tokenomics were set late last year, with changes made after feedback from the community. Since then, the team has better understood the needs and uses of the reserves and heard concerns about the high fully diluted valuation (FDV) and future emissions, especially for upcoming Jupuaries.

To address these concerns, the proposal includes cutting the token supply significantly and letting the community manage future emissions. This approach aims to streamline the tokenomics and ensure everyone understands the current and proposed token distributions. 

Involving the community in major future Jupuary votes should reduce uncertainties and align everyone with Jupiter’s next phase. “With the audit, ethos essay and this reduction in supply, we hope the community will emerge from this vote with a much enhanced understanding of the collective plans for JUP,” Meow said.

In conclusion, Jupiter’s plan to burn $2.8 billion in JUP tokens is a critical step to enhance tokenomics and align the community with its future. By reducing the total supply by 30% and cutting emissions, Jupiter addresses concerns about high valuations and future emissions.