Jupiter investors are dissatisfied with the DAO's plan to allocate $140 million to team members.
- The Jupiter DAO voted to approve a new compensation plan on Monday.
- Meow plans to increase his stake and lock tokens for five years.
- The meme coin market crash has made DeFi investors anxious.
The Jupiter DAO, the digital autonomous organization behind the largest decentralized trading aggregator in the Solana ecosystem, voted on Monday to provide a larger equity share to the project's anonymous creators.
The vote passed with 63% support, granting Meow, the anonymous creator of the Meow protocol, a 7% token supply share currently worth $250 million.
But this is not the reason the vote has sparked controversy.
Meow was able to obtain this additional equity share because he pre-allocated 28 million Jupiter tokens (currently worth $140 million) to cover salaries and bonuses for 65 new team members.
Some DAO members have criticized the compensation plan as excessive and believe it is a poor use of funds.
"Community funds should be used for community projects, and team funds should be dedicated to the team," said a DAO governance participant named Pyhtonia.
Three-year lock-up
Some dissatisfied Jupiter investors believe the compensation plan will dilute the value of their holdings, although the tokens used to pay the team will be locked up for at least three years.
However, supporters argue that top crypto talent should be compensated accordingly.
"If you don't like the compensation Jupiter is giving to its engineers, you need to realize that this goes far beyond a single company, even beyond 'our industry'," wrote Edgar Pavlovsky, a core contributor to the Solana client Paladin, on X.
"This is driven by global market forces."
Jupiter co-founder Siong Ong stated that crypto protocols must compete with tech giants like Meta and Google to offer attractive salaries to attract top talent.
"I will always defend the team's allocation for that reason," Ong said.
Higher salaries
According to Glassdoor data, the average annual salary for software engineers in the US is $163,000.
Jupiter's leadership stated they hope to attract the type of top talent that works at FAANG companies (Facebook, Amazon, Apple, Netflix, and Google) with even higher salaries.
"I will always defend the team's allocation for that reason." — Siong Ong, Jupiter
This controversy is the latest example of DeFi investors' dissatisfaction with project teams continuing to receive massive salaries during the crypto market downturn.
DeFi investors are increasingly demanding that project teams deliver actual value to their protocols to justify their investments.
Reducing expenses
For investors, high team member salaries that do not generate corresponding returns for the project can only deplete the DeFi protocol's treasury.
According to DeepDAO data, DAO treasury reserves have fallen to $17 billion, down nearly 50% from the beginning of the year.
Some DAOs, such as Aave and Nouns, have already taken cost-cutting measures. Aave DAO members hope to review a governance proposal to reduce expenses.
The Jupiter team did not respond to a request for an interview with DL News.
All of this is happening as Jupiter's token has plummeted to a historic low of $0.45 this week, down from a peak of $2 less than two months ago.
While the entire crypto market is declining, Jupiter's 75% price drop far exceeds the market average, primarily due to the collapse of the meme coins that were popular on Solana.
Backlash
As a major player in the meme coin space, Jupiter's weekly fee revenue has dropped from $42 million at the meme coin peak in January to $20 million, according to defillama.
This is not the first time Jupiter has faced controversy over team member compensation.
Last year, there was a strong backlash over a budget proposal, although it was ultimately approved, to allocate a total of $7 million to pay the salaries of four team members.
