Jupiter co-founder intends to stop JUP buyback, is it a strategic adjustment or a move of helplessness?

Jupiter founder SIONG posted a proposal on social media to consider stopping the quarterly JUP buyback program. The company invested over $70 million last year in buybacks, but the token price did not see substantial improvement.

Solana founder Anatoly Yakovenko responded with an alternative: “Store profits as ‘protocol assets payable in the future,’ allowing users to lock and stake for a year to earn yields.”

As discussions around token staking rewards intensify, a key question emerges: in a crypto market with persistent structural sell pressure, what kind of tokenomics model can truly create long-term value for holders?

01 Origins of the Debate

Jupiter co-founder SIONG publicly initiated a discussion on social media, directly questioning the effectiveness of the nearly one-year-long buyback strategy. Data shows that over the past 12 months, more than $70 million has been spent on JUP token buybacks.

Confusingly, such a large-scale capital injection has not translated into a substantial increase in the token price. SIONG admitted that the token price performance “has not changed much” despite the buyback investments, posing a clear confidence challenge for both the project team and the community.

This discussion quickly escalated, linking with Helium’s decision to halt HNT buybacks, leading to a broader industry reflection on whether “buyback mechanisms are still effective.”

02 Core Community Perspectives

Solana founder Anatoly Yakovenko proposed a different approach to capital allocation. He believes traditional finance requires investment cycles of over 10 years and suggests converting profits into ‘protocol assets payable in the future.’

He advocates encouraging long-term locking through staking: “Allow users to lock and stake for a year to earn token yields. As the balance sheet grows, stakers can receive greater returns.”

Community member fabiano.sol calculated an economic model: currently, Jupiter distributes 50 million JUP (about $10 million) quarterly as staking rewards.

If the $10-20 million originally used for buybacks is redirected to staking rewards, at current prices, it could generate approximately a 25% annualized yield, which would be a highly attractive incentive for holders.

03 Alternative Proposal Discussions

Jordi Alexander, founder of Selini Capital, proposed a more flexible plan: “Adjusting buyback amounts based on price is a good idea. If the price is low, buy back as much as possible, as this can significantly reduce supply.”

He suggests introducing a dynamic buyback system based on a P/E ratio model, where each protocol can design parameters according to its situation, implementing a more transparent and predictable buyback strategy through automation.

Kyle Samani, co-founder of Multicoin, agreed with rewarding long-term holders but emphasized that the mechanism needs optimization.

He pointed out that traditional stock markets lack effective mechanisms to reward long-term shareholders, and crypto projects should explore how to “distribute excess value proportionally to long-term holders.”

04 Deep Analysis of Token Economics

The community conducted an in-depth analysis of the reasons behind the perceived ineffectiveness of buybacks. Some argue that the root cause of price weakness lies in “team unlocks and continuous selling,” rather than the inefficiency of buybacks themselves. This structural sell pressure continuously offsets the positive effects of buybacks, creating a resource depletion cycle.

User Stoic Savage offered a more radical view, stating that the core issue is the structural flaw within the Solana ecosystem. He describes Solana as a highly “internalized” ecosystem, with internal transactions, team unlocks, and extractive tokenomics constantly counteracting any positive impact from buybacks.

This view resonated strongly within the community, with many agreeing that the Solana ecosystem has a long-term “insider priority” problem.

05 Price Performance and Market Impact

As of January 5, 2025, JUP’s trading price on Gate was $0.21928408. Over the past 30 days, JUP’s price fluctuation was -3.81%.

Technical indicators show a complex market sentiment. Most short-term moving averages signal a sell, but some long-term indicators like SMA 21 ($0.2104) show buy signals. The Relative Strength Index (RSI) is at 50.81, indicating a neutral market.

Notably, Jupiter still has large airdrop plans in 2026. The project announced that the total airdrop amount for 2026’s Jupuary will remain at 700 million JUP, with an initial distribution of 200 million JUP, including 25 million JUP for stakers and 175 million JUP allocated to users with real interactions.

06 Future Outlook and Investment Advice

At this critical juncture of tokenomics transformation, Jupiter faces two possible paths: one is to continue the traditional buyback strategy but introduce a dynamic adjustment mechanism; the other is to fully shift to a staking reward model, directly incentivizing long-term holding.

Community discussions favor the latter. For JUP holders on Gate, this means reevaluating holding strategies. If the project adopts a staking reward model, locking tokens long-term could yield significantly higher returns. Participating actively in Jupiter ecosystem interactions before the January 30, 2026 snapshot could also earn additional airdrops.

Industry observers note that the buyback controversy at Jupiter reflects a broader industry reconsideration of token value support mechanisms. As markets mature, relying solely on capital buybacks to maintain prices faces increasing skepticism, and models emphasizing fundamentals and community incentives are gaining recognition.

Future Outlook

Jupiter community influencer fabiano.sol outlined a possible roadmap: in the future, Jupiter might maintain its current staking reward scale while reallocating funds originally used for buybacks toward user growth incentives and ecosystem development.

He envisions that part of the protocol revenue will still go into the buyback fund, but more resources will flow into areas that can directly create value. The Solana ecosystem is shifting towards a narrative of “practicality and privacy,” which may provide a broader stage for Jupiter’s valuation reappraisal.

As the market begins to reward projects that build sustainable tokenomics models, Jupiter’s current pains could become the foundation for its future rise.