The Jupiter project is a DEX aggregator (kind of search engine) created to let users find the best price of the moment on a single platform. Jupiter has added some important features that are not common on a DEX, such as limit orders, perpetuals and DCA (dollar cost averaging).
Jupiter can be seen as a hub between multiple decentralized exchanges (DEX), seeking the most favorable price for the user to buy or sell.
We will go into a little more detail later.
In the experimental phase, the stone age of Jupiter, they were a standalone project that Mercurial and Serum wanted to provide more usability for stablecoins. They then became the first cross-protocol liquidity swap platform on Solana.
The platform was launched in November 2021 as a platform for DeFi on the Solana blockchain with the goal of boosting Solana DeFi.
In 2022, they wrote a manifesto of sorts, where they all wanted to go. The roles for the community were handed out, namely the Jupioneer (first participants), the Jupassador (constantly committed to Jupiter) and the Jupion (winner of events and helpers).
September 2023, DCA introduction.
Nov. 1, 2023: Bridges.
Nov. 2, 2023: Jupiter green paper, in which they set the blueprint for all future development.
Jan. 23, 2024 launched their Jupiter Launchpad for Solana projects: LFG.
Jan. 31, 2024, there was a major airdrop of the Jupiter token JUP.
So the platform existed for years before they launched their token JUP.
Solana's ecosystem includes several decentralized exchanges that use swaps, liquidity pools and an Automated Market Maker (AMM). Since prices can vary quite a bit, Jupiter has stepped up to protect traders by designing a DEX aggregator that looks for the most favorable price of cryptocurrencies for traders.
Apparently, traders think this is a great idea, as it has since become one of the most widely used apps on Solana, processing some $350 million worth of crypto assets daily, spread across some 100,000 unique wallets and dozens of DEXs and AMMs.
Jupiter scours the Solana blockchain to collect core data such as price, liquidity and fees. They need those to determine the best price. Sometimes they can even use multiple liquidity pairs on multiple exchanges for a single swap. These are called Hops.
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Anyone who has ever traded on a DEX knows the irritations and limitations. For example, you cannot set a stop loss or enter a limit order. This means you have to watch the market all the time and be physically present at every buy and sell to do the swap.
Fortunately, there are a number of DEXs these days that make trading life a lot easier.
Jupiter offers limit orders, where you can enter a quantity and a price at which you want to own or sell an asset. That way you don't have to get married to your screen. The Jupiter protocol then goes to work for you and if there is a DEX that meets your parameters the trade is executed automatically.
Sometimes there is not enough liquidity to execute the order, then the protocol can also trade in small bits until the swap is complete. Jupiter says this system is as effective as a stop loss or limit buy order on a central exchange.
This is very exceptional for a DEX, though. Their dollar cost averaging (DCA) approach allows you to both buy and sell assets at different prices on Jupiter. The idea behind it is that this way a trader is not dependent on a single price at a specific time, but multiple trades at different times, giving you both favorable and less favorable prices. As a result, you soon have an average result, which is precisely what DCA is all about.
For example, you can purchase SOL in portions of the total sum over several days, such as 50 euros per day over a 30-day period. First you then put 1500 euros in a vault. Each day, 50 euros worth of SOL is then purchased, with some prices being a bit better than others.
If you want to start trading a currency other than Solana, you still need an Associated Token Account to store the cryptocurrency in your wallet.
As is more common with a DEX, Jupiter also has support for a bridge. A bridge is a bridge between blockchains. For example, if you are on the Solana blockchain and want to trade on the Ethereum blockchain you need a bridge. As is obvious, Jupiter will choose the cheapest one, if possible.
Jupiter also supports the Wormhole protocol for bridging. This is an inter-network messaging protocol that allows communication between different blockchain networks, like they have one between Ethereum and Solana.
A perpetual is a continuous contract, where the future of an asset can be bet on. This allows you to bet long and short on the price of Bitcoin, for example, without a fixed end date.
You can leverage up to 100x. As long as you establish collateral in a smart contract, you have quite a lot of freedom in this.
Liquidity is provided by users who want to make money from traders and leverage traders. They lock their money in the perpetuals vault and start earning when users deploy these funds. With perpetuals, you can use Wrapped Bitcoin, USDT, USDC, SOL and ETH here.
For example, if a trader provides 50 euros as collateral and he wants 10x leverage, he has 500 euros at his disposal. If the price rises by 10% he has a profit of 100%, if the price falls by 10% he has forfeited his collateral, to which is added the cost of borrowing and trading. According to Jupiter, there is no price impact at all in perpetuals trading, no slippage and very deep liquidity by using LP pools and the Pyth oracle to set the price.
Noted cat lover meow @weremeow has announced on Twitter/X their Jupiter LFG Launchpad. Not known for good manners, this meow explained the purpose of their Launchpad.
Launchpads have become fairly well known since Binance had opened their own pad. With a Launchpad, you launch a new coin or token on your own exchange or platform.
Jupiter wants to use their community for projects on Solana that go for long-term success and are not based on hype, FOMO or back pulling. They are not going to work with complex reward systems, which usually just ruin things. Insider voting is not appreciated here.
New projects must first be approved by their DAO through governance. The community then supports such a project with liquidity and technical support. For several days, such a new project will be extensively in the news on the platform, so that a long-term relationship can be built with a project, rather than dumping it immediately after launch.
Jupiter also has all kinds of pricing models on offer, in ranges from low starting price to rapidly higher prices to very high starting price and gradually lower prices, according to the needs of the new platform.
They are going to launch two tokens on it in early February (it is jokingly called jupuary here) 2024 with the deployment of their own JUP token.
They try to do things very differently here, so that the market determines what the price is and not all kinds of complicated isolated pools. Also, Jupiter itself provides enough liquidity, so you don't get weird volatility at the start, as is often the case with new coins.
A DAO is a decentralized autonomous organization, which can decide for itself where a platform goes. So the Jupiter DAO can decide for itself, through governance, which projects will be launched on the Launchpad.
Jupiter can now count on a large network of participating apps. They are therefore the hub in the Solana network and can count well-known projects such as Helium, Phantom, Coinbase Wallet and Orca among their ecosystem.
Per day, a total of a sloppy $370 billion is traded through their ecosystem.
The total amount of JUP tokens will be 10 billion. Of these, 1.35 billion are now in circulation as of February 2024. Of these, 1 billion tokens have been issued via airdrop to active members who have supported the platform with trading or have been valuable in some other way.
For a change, these tokens were not distributed purely based on how much volume you had in trading, but partly based on activity, so that not simply the rich get richer, but many more users get coins that they will also use. The market capitalization is now already 650 million eur.
Half of the number of tokens will be used by the team and the other half will be used for the community.
After one year, the team's tokens will start earning interest for two years. The other half will go toward multiple airdrops, community grants and ecosystem support.
The JUP token can be used in their DAO to vote for or against changes to Jupiter, such as new projects, fees or conditions.
When you see that there are still so many tokens to come to market, the risk of dilution is very high. So it is a good idea to look at their roadmap to see when many tokens will be released for trading.
Given their huge user numbers, this coin could go down very well. The exceptional aspects of their DEX features and launchpad also add to the appeal of their platform.
Since they are launching new coins on Solana, this may provide additional incentive if Solana does well. However, it is true that the price will have to stabilize at some point before you can gauge it.