Jupiter Buyback Program Controversy: Analysis of the Effectiveness of the $70 Million Investment
TL;DR
Jupiter Exchange invested over $70 million in JUP token buybacks in 2025, but the token price plummeted 89% from ATH $1.83 to the current level of $0.21. On January 3, 2026, co-founder Siong proposed halting buybacks and redirecting funds to user growth incentives, sparking heated debate within the community. On-chain data shows approximately 36.7M JUP have been locked for 3 years, but market performance has not improved, with the weekly RSI in oversold territory at 34.7.
Core Analysis
Repurchase plan implementation status
Activation and Mechanism :
- Launch date : Announced on February 13, 2025; USDC accumulation begins on February 17; official implementation begins on February 18.
- Funding source : 50% of protocol fees (from Jupiter Ultra, limit orders/DCA/vault, perpetual contracts, and RFQ business)
- Execution method : Purchases are automatically made on-chain every hour through the Jupiter aggregator and locked in the Litter Box multisignature wallet for 3 years.
- Investment scale : Approximately US$70 million in total by 2025.
- Purchase quantity : Estimated purchase of 300M-350M JUP (approximately 10% of the circulating supply).
Financial data :
| index | 2025 | Q1 | Q2 | Q3 | Q4 |
|---|---|---|---|---|---|
| Total revenue of the agreement | ~$272M | $76.44M | $64.94M | $77.09M | $54.26M |
| Repurchase allocation | ~$145M | $26.1M | $25.42M | $51.94M | $42.55M |
| actual expenditure | ~$70M | - | - | - | - |
Background of the proposal to stop the buyback
Siong Proposal Details (January 3, 2026, 02:18 UTC):
"We spent over $70 million on buybacks last year, but the prices obviously didn't change much. We could use that $70 million to provide growth incentives for existing and new users. Should we do that?"
Key timeline :
| Date/Time | event | Details |
|---|---|---|
| 2025-02-13 | Buyback program launched | Announced 50% of expenses to be used for buybacks |
| 2025-02-18 | First execution | Start automatic hourly purchases |
| 2026-01-03 02:18 UTC | Siong initiated a discussion | Questioning the effectiveness of buybacks, refer to the case of Helium CEO halting HNT buybacks. |
| 2026-01-03 16:16 UTC | Clarification Statement | "I'm not saying I'll definitely do that... the purpose of this post is to gather feedback." |
| 2026-01-04 | state | It is still in the community consultation stage and no final decision has been made. |
Supporting measures :
- Jupuary 2026 airdrop reduction : from the originally planned maximum of 700M JUP to 200M JUP (175M to paid users, 25M to stakers).
- Additional incentives : Hold/stake until the end of 2026 to receive a 200M reward, with 300M reserved for Jupnet incentives.
- Snapshot date : January 30, 2026
Community Response Analysis
Supporters of stopping buybacks :
| KOL | position | Key points |
|---|---|---|
| @FabianoSolana | support | It should be changed to distribute USDC profits to stakers, providing a reason for holding the stake. |
| @sol_nxxn | support | It is predicted that USDC revenue sharing will become the standard governance token. |
| @jupceo | support | It is recommended to mandate staking to enjoy fee discounts and allocate 25-40% of the income as real USDC earnings. |
| @oldhawksol | support | The proposal allocates 50% to USDC rewards for stakers, 30% to user incentives, and 20% to the national treasury. |
Opposition/Questioning Camp :
| Opinion type | Core Argument |
|---|---|
| Price pressure concerns | Stopping buybacks during the ongoing unlocking period will exacerbate selling pressure. |
| Promise to drop the charges | Some believe that abandoning the repurchase is an act of "running away" from investors. |
| Criticism of Token Economics | The token model itself is flawed; stopping buybacks will decouple JUP from the protocol. |
Siong responded :
- It emphasizes that 99% of its net assets are JUP tokens.
- Denying the "absconding" accusations, they stated that the purpose of the discussion was to learn from the community.
- The idea of passive staking rewards was rejected, as it was deemed insufficient to drive growth.
Main narrative themes :
- Efficiency Controversy : Buybacks were neutralized (buy and sell), failing to create sustained deflation.
- Revenue growth depends on : Long-term success of buybacks requires support from increased revenue from the agreement.
- Lack of token utility : JUP lacks use cases beyond governance, and USDC may be more effective in real yield.
- Ecosystem Case Study : Helium's decision to halt HNT buybacks and shift towards network expansion serves as a precedent.
On-chain data verification
Key Wallet Tracking :
| Wallet types | address | Positions | percentage | Function |
|---|---|---|---|---|
| Litter Box (Repurchase Vault) | 6tZT...NsFX | ~36.7M JUP | 0.54% | Locked for 3 years, no leaks |
| Team Cold suspected | 61aq...HXV | ~1.8B JUP | 26% | Team Reserves |
| Community Cold suspected | EXJHi...Hm6T | ~1.7B JUP | 25% | Community allocation reserves |
| DAO Treasury | Multiple signatures | 103.9M JUP 8.2M USDC | - | Grants/Operating Expenses |
Supply dynamics :
- Total supply : 7,000,000,000 JUP (3B destroyed by 2025)
- Circulating supply : 3,190,419,072 JUP (45.6%, as of 2026-01-04)
- Impact of buyback lock-up : Effectively reduces circulating supply by approximately 10% (300M-350M JUP).
- Unlock Schedule : Next team unlock 2026-01-28 (1-year cliff + 24-month linear release in progress)
Related to Agreement Revenue and Buyback :
- The peak repurchase rate for high-income months (Q2/Q3) is approximately $40 million.
- Fee sources: DEX aggregators (approximately $306 million in fees in Q3), perpetual contracts (cumulative SOL trading volume of 3.3 billion).
- Q4 revenue declined to $54.26 million, reflecting a market slowdown .
Transaction Mode :
- Starting February 18, 2025, the Litter Box wallet will receive JUP from the DEX hourly.
- No outflow transactions occurred during the entire lock-up period (strict adherence to the 3-year lock-up period).
- DAO Treasury ongoing operating expenses (e.g., 610,000 JUP exchanged for HUMA in 2025-06) dune
Technical Analysis
Dismal price performance :
| index | numerical values | change |
|---|---|---|
| Current price | $0.2113 | - |
| ATH (2024-01-31) | $1.83 | -89% |
| Annual performance | - | -78% |
| 24 hours | - | +6.9% (Short-term rebound after the release of Mobile V3) |
Multi-period momentum analysis :
| cycle | RSI | MACD histogram | Signal |
|---|---|---|---|
| 1 hour | 61.2 | +0.00019 | bullish crossover |
| 4 hours | 68.2 | +0.00084 | Bullish momentum accelerating (approaching overbought levels) |
| 1st | 52.4 | +0.0049 | Neutral, bullish divergence |
| 1 week | 34.7 | -0.011 | Oversold (50.9 five weeks ago) |
Trend Structure :
- Daily chart : Price is above EMA12 ($0.201) and EMA26 ($0.207), but below SMA50 ($0.221) and SMA200 ($0.399).
- Weekly chart : Price is below all major moving averages (EMA12 $0.271, EMA26 $0.362, SMA50 $0.479).
- Bollinger Bandwidth : The lower band on the weekly chart is $0.113, indicating a long-term consolidation range.
Key support/resistance :
| type | Price range | in accordance with |
|---|---|---|
| support | $0.208 | 1-hour BB middle track |
| $0.201-$0.197 | EMA12/1-day BB lower rail/long liquidation cluster $816K | |
| $0.185 | 4-hour BB lower rail | |
| resistance | $0.212 | 1-hour BB upper band / short liquidation $5.8K |
| $0.218 | 4-hour BB on track | |
| $0.222 | 1 day Supertrend/SMA50 |
Derivatives market data :
- Total open interest : $46.5M (24-hour increase of 6.9%)
- Funding rates : Negative for Binance/OKX/WhiteBIT (Short-dominated)
- 24-Hour Clearing : Shorts $41K vs. Longs $13K
- Liquidation risk zone : $0.19 below, accumulated long positions $871K; $0.23 above, accumulated short positions $811K.
Trading volume and capital flow :
- 1-day CMF : +0.107 (Accumulating signal)
- 1-day OBV : 86M (positive value)
- The short-term technical rebound is related to the release of Mobile V3, but the oversold condition on the weekly chart indicates long-term weakness.
Repurchase and price correlation :
- The first repurchase in February 2025 corresponds to an approximately 60% price increase (historical reference).
- The current price of $0.21 is testing the support level established during the repurchase period, but has failed to prevent the long-term downtrend.
- The $70 million investment failed to reverse the downward pressure on fundamentals.
in conclusion
Jupiter's $70 million buyback experiment revealed the limitations of token buybacks in the absence of practical support . Despite a transparent buyback mechanism (36.7M JUP locked in an on-chain Litter Box wallet) and well-executed procedures (automatic purchases every hour), an 89% price drop proved that simply buying could not counter structural selling pressure and the lack of token value capture.
The core contradiction lies in the decoupling of protocol revenue growth (to $272M in 2025) from token value, with repurchase funds being continuously unlocked and offset by sell-offs due to a lack of holding incentives. Siong's proposed redistribution plan (stopping repurchases and shifting to user incentives or USDC revenue sharing) represents a strategic shift from passive defensive deflation to proactive growth-oriented value creation .
The community's divergence reflects a trade-off between short-term market support needs and long-term mechanism optimization : supporters value growth potential and the attractiveness of real yield, while opponents worry that abandoning buybacks during the unlocking period will exacerbate selling pressure. Technically, the weekly oversold condition (RSI 34.7) suggests that valuations have fully reflected pessimistic expectations, but in the absence of catalysts, the sustainability of the rebound is questionable.
The final decision still awaits a community vote, but this discussion marks a crucial juncture in the evolution of DeFi governance tokens from symbolic buybacks to sustainable value distribution mechanisms . Jupiter, as the leading DEX in the Solana ecosystem, will set an important precedent for the industry with its choice.