Jupiter Community Prepares to Vote on 30% Token Supply Reduction Proposal

The community for Jupiter, a Solana-based decentralized exchange aggregator, is preparing to vote on a proposal to reduce its token's supply by 30%.

Solana-based decentralized exchange (DEX) aggregator Jupiter is preparing for its community to vote on a proposal to reduce the token's supply by 30%.

According to a recent report, voting will begin on Aug. 1 with the proposal advocating to reduce JUP's supply by nearly one-third. The proposal aims to reduce both team allocations and new token emissions by 30%.

The proposal to reduce JUP's supply was first floated in June. Meow, Jupiter’s pseudonymous founder, said the move will “cut the fat” from the project's fully-diluted valuation (FDV) and address community concerns regarding JUP's high rate of new token emissions.

JUP is currently the 68th largest cryptocurrency with a market capitalization of $1.3 billion and a circulating supply of 1.35 billion tokens. However, one billion JUP is scheduled to be distributed to community members in annual airdrops over four years. This means that JUP's supply will be heavily inflated moving forward.

The claim period for the first JUP airdrop closed on July 31, with 780 million of the one billion JUP being claimed by nearly 640,000 users. The remaining 220 million JUP were returned to Jupiter's community wallet.

The Jupiter team is also set to receive four billion JUP, which will be split evenly between a “strategic reserve” and team member allocations, held in a four-of-seven multisig account. Team member tokens are subject to a two-year lock-up from February 2024, with vesting to commence from February 2025. Additionally, Jupiter's four-person core team were allocated 450,000 USDC worth of JUP for first-year salaries.

In total, JUP's supply is programmed to max out at 10 billion JUP, giving it an FDV of nearly $10 billion at present.

‘Community eats first’On July 31, Meow also penned a lengthy manifesto outlining the core principles that will underpin how the Jupiter team's tokens are managed, ensuring that the community “eats first.”

Meow stated that Jupiter team tokens originally scheduled to begin unlocking during the first year of vesting will be staked for an additional two years. Both Meow and his fellow co-founder, Siong, also committed to locking up all of their tokens until at least June 2026.

He added that most other team members have similarly committed to locking up the majority of their token allocations over the same period of time, pledging to liquidate “only what they need for their personal financial security” from February 2025.

Finally, the Jupiter community will receive at least three months advance notice ahead of the project releasing any of its strategic reserve tokens for strategic reasons, with Meow emphasizing that reserve sales will be managed proportionally to available market liquidity.

According to DeFi Llama, Jupiter consistently hosted at least $200 million in trading volume throughout July, down from more than $1 billion in Q2. The protocol also boasts a total value locked (TVL) of $599.4 million, ranking it as a top 10 Solana protocol.

The price of JUP is down 43% since posting a local high in April, according to The Defiant’s crypto price feeds.

Related: Jupiter’s Launchpad Mechanism Riles Up Crypto Community