Written by Mint Ventures
In the previously published article "Gold Mining in the Sand: Finding Long-term Investment Targets to Cross Bull and Bear Markets (2025 Edition Part 1)", we sorted out and introduced several projects in the lending track, such as Aave, Morpho, Kamino, MakerDao, and Lido and Jito in the staking track. This article, as the middle article in the series, will continue to introduce projects with high-quality fundamentals and long-term potential.
PS: This article is the interim thinking of the two authors as of the time of publication. It may change in the future, and the views are highly subjective. There may also be errors in facts, data, and reasoning logic. All views in this article are not investment advice. We welcome criticism and further discussion from colleagues and readers.
3. Trading track: Cow Protocol, Uniswap, Jupiter
3.1 Cow Protocol
Business Status
Products and mechanisms
Cow Protocol is a decentralized trading aggregation protocol, and its core product is the decentralized trading aggregator CoW Swap. The "CoW" in the name stands for Coincidence of Wants, which means using a matching mechanism to directly match the needs of buyers and sellers. CoW Swap uses batch auctions as a price discovery mechanism to aggregate users' trading intentions (order requirements) and perform unified settlement in each block.
This mechanism allows user orders to be matched directly without the need for traditional market makers or liquidity pools. When two parties happen to want to exchange the assets they need, the transaction can be completed directly, avoiding the middleman fees. For the part that cannot be matched directly, CoW Swap routes the remaining orders to decentralized exchanges (DEX) or other aggregators to obtain liquidity. This design minimizes slippage and handling fees, and through batch matching, all transactions in the same batch share the same clearing price, eliminating price unfairness caused by the order of first and last orders.
In addition, CoW Swap introduces a Solver bidding mechanism: multiple third-party solvers compete to provide users with the best transaction execution plan, and the winner obtains the right to execute the batch of transactions and bears the gas fees on the chain. Users only need to sign the order intention offline, without having to pay the on-chain handling fee, and there will be no transaction costs if the transaction is not completed. This "intention matching + solver bidding" model makes the user experience more user-friendly (no need to worry about gas loss due to failed transactions) and provides a certain degree of MEV (maximum extractable value) protection-since order matching is carried out off-chain, solvers need to bid to return MEV to users, making MEV attacks such as preemptive trading difficult to work.
CoW Swap currently provides services on Ethereum, Arbitrum, Gnosis and Base.
In addition to Cow swap, another product of Cow Protocol is MEV Blocker, which was developed by CoW DAO in collaboration with partners such as Beaver Build and Agnostic Relay. After users switch their wallet's RPC to MEV Blocker, their transactions will go through a private network of searchers (rather than entering Ethereum's public memory pool, which is visible to all searchers and leads to MEV attacks), preventing sandwich attacks and front-running attacks from the source.
* The process by which regular transactions on the Ethereum network are packaged into blocks: After a user initiates a transaction, the transaction first enters the public memory pool; searchers monitor the memory pool, look for MEV opportunities, and package transactions into bundles; builders receive bundles from searchers and build blocks; validators receive blocks from builders, verify them, and add them to the blockchain.
Profit Model
Cow Protocol's revenue sources can be roughly divided into two categories:
1. The share of Cowswap’s transaction surplus. The so-called transaction surplus refers to the money that Cowswap provides users with through its bidding network that is more than the initial bid. Currently, Cowswap charges a 50% fee for the transaction surplus of most networks, but the fee does not exceed 1% of the transaction volume.
In addition, for those external protocols (partners) that have integrated Cow Protocol, Cow Protocol will charge 15% of the transaction fees generated by the partners (the proportion can be customized, but not more than 1% of the transaction volume) as a service fee.
Finally, Cow Protocol will also charge a fee for the overall network transaction volume of some networks, such as Gnosis and Arbitrum. The fee rate is currently 0.1% of the transaction volume (excluding special trading pairs such as stablecoins).
2. The income generated by MEV Blocker is extracted from the income obtained by the validator through MEV Blocker, with a ratio of approximately 10%.
In the revenue structure of the protocol, most of the revenue comes from Cowswap's trading surplus share, so the business data we will focus on in the future will also focus on Cowswap.
Business data
We will focus on two business data: Cow Protocol's transaction volume and protocol revenue.
Trading Volume
Data source: Dune
As an emerging intention-matching protocol, CoW Swap has experienced rapid development in the past three years. In 2021, the protocol was still in its infancy, with small early trading volumes. Entering 2022-2023, Cow Protocol's business data began to improve as the demand for MEV protection and efficient aggregated transactions in the DeFi field grew. In 2024, the protocol's trading volume further climbed sharply: monthly trading volume hit a new high at the end of 2024, with a monthly turnover of nearly US$7.8 billion in December 2024, and nearly US$6.9 billion in February 2025, much higher than previous years.
It is worth mentioning that CoW Swap is increasingly favored by DAO organizations and professional institutions because it provides large-scale, low-slippage transaction solutions. In 2023, about one-third of DAO on-chain transactions were completed through CoW Swap, and by February this year, this proportion climbed to 79.5%.
Data source: Dune
Agreement income
Data source: Dune
After entering 2024, Cow Protocol began to actively explore protocol revenue generation and conducted multiple rounds of revenue generation tests. The revenue also showed a steady trend of gradual growth month by month. January 2025 was the highest month in terms of revenue (calculated in ETH), with a single-month protocol revenue of 641 ETH, which was approximately $2.13 million based on the average monthly ETH price of $3,328. In February, the revenue was 586 ETH, and the protocol revenue was approximately $1.56 million based on the average monthly ETH price of $2,668.
Protocol Incentives
Data source: Tokenterminal
Currently, the main expenditure of Cow Protocol is the Cow token incentive for Cow Protocol network solvers. Network solvers are rewarded with Cow tokens based on the quality of their trading solutions (trading surplus provided to traders). According to Tokenterminal, the expenditure on Cow token incentives in the past year was about US$7.4 million. The protocol token incentives in January and February 2025 were US$858,000 and US$961,000, which were lower than the protocol revenues of US$2.13 million and US$1.56 million in the same month.
According to the 2024 project revenue and expenditure disclosed by Cow Protocol in January this year, excluding the development costs of the protocol, the Solver token rewards spent in 2024 were approximately US$5.2 million, while the protocol revenue for the whole year was approximately US$6 million, which has exceeded the token incentive expenditure.
Competition
Cow Protocol's main battlefield is the field of decentralized trading aggregators. In the early days, 1inch dominated the field, but in the past two years, the pattern has begun to diversify. According to the latest data from The Block in March 2025 (excluding UniswapX), 1inch's market share has fallen from the top (on March 5, 1inch's Fusion function was attacked, with losses of more than 5 million US dollars, exacerbating users' concerns about its security), and only ranked second with 22.8%, while Cowswap surpassed with 33.85%, ranking first for the first time in monthly data.
Data source: The Block
In addition to 1inch and CoW, the top five aggregators include ParaSwap, 0xAPI/Matcha (aggregation interface provided by 0x protocol), KyberSwap and Bebop, etc. These competitors each have a share of around 10% or less. Among them, ParaSwap and 0x have a long history and a stable user base, while KyberSwap (Kyber Network transformed into an aggregation) and Bebop launched by Wintermute have both gained a certain number of incremental users recently.
Overall, the competition in the DEX aggregation track has not diminished, and new players continue to emerge. Although CoW Protocol has become the new leader in this field, its position is not yet stable.
In addition to traditional aggregate trading products, two other competitive projects worth paying attention to are UniswapX launched by Uniswap, and UniversalX, a full-chain trading platform launched by Particle Network.
UniswapX
UniswapX is a cross-platform aggregated trading function launched by the Uniswap team in the second half of 2023. UniswapX essentially provides users with a similar intention order + filler mechanism: users submit offline signed orders on the Uniswap front end, and third-party "fillers" (similar to the solver role of the Cow Protocol network) in the network can take over the order and trade on behalf of the user on the chain.
The process is that the order filler issues a quotation and enjoys exclusive matching rights for a short period of time. If the transaction fails within the specified time, it will enter the Dutch auction stage and more order fillers will participate in the bidding. This model is similar to the CoW Swap solver bidding, both of which are off-chain matching and on-chain settlement solutions. With Uniswap's brand and large user base, UniswapX has been quickly integrated into its front-end interface since its launch and launched on the ETH network.
It is worth noting that the industry once questioned whether UniswapX "copied" the intention matching model of CoW Swap. Voices including Curve officials pointed out that CoW Swap had already pioneered the solver model, and UniswapX was not the first. Despite the controversy, UniswapX still took advantage of the Uniswap ecosystem to gain considerable trading volume in a short period of time. At the beginning of 2024, its share of the EVM aggregate trading market once exceeded 10% (Cowswap's share was about 14% at the time), but its market share gradually declined afterwards. According to data disclosed by Cow Protocol in March this year, UniswapX's market share in aggregated transactions was about 5.5%.
UniversalX
UniversalX is another new project that has attracted much attention, focusing on cross-chain aggregate transactions. Launched by Particle Network and launched on the mainnet at the end of 2024, it aims to enable transactions of assets on any chain without the need for a cross-chain bridge. Its core concept is "chain abstraction": users can deposit assets from multiple chains into a unified on-chain account, and use the UniversalX platform to buy and sell tokens from any chain with a unified balance. The platform will automatically complete cross-chain exchange and settlement behind the scenes.
As a new entrant in the aggregator field, UniversalX is entering the cross-chain transaction segment, which is different from projects such as Cow Protocol that mainly focus on single-chain aggregation. However, with the development of the multi-chain ecosystem, UniversalX may compete with Cow Protocol in the future. If Cow Protocol expands to more chains or provides cross-chain functions, it will enter the competition field of UniversalX.
Cow Protocol’s Competitive Advantages
In the face of fierce competition, Cow Protocol has been able to rise and grow steadily. Its competitive advantages can be analyzed from two aspects: products and brands:
1. Products
· Technical and mechanism advantages of trading products: Cow Swap is the first protocol to apply batch auction matching and solver competition to DEX aggregation, which has a first-mover advantage. Its unique Coincidence of Wants direct matching mechanism can complete transactions without the need for traditional liquidity pools, reducing users' dependence on AMM pools, and reducing slippage and fees. At the same time, the unified clearing price mechanism avoids price exploitation caused by transaction order, allowing heavy traders, especially institutional orders, to trade at fair prices.
In contrast, although later UniswapX and 1inch Fusion borrowed similar ideas, they differed in their specific implementations. For example, CoW Swap uses a sealed auction once per block, and all proposals are submitted at the same time and then the best one is executed, which compresses the MEV space to the greatest extent. This mechanism is considered to be more effective in preventing unfair behaviors such as preemptive trading than UniswapX's limited-time exclusive order filling and Dutch auction.
· MEV protection and security: The dual product structure of Cow Protocol trading service + MEV Blocker further enhances the anti-MEV ability of transactions, extracts user transactions from Ethereum's public memory pool, and transfers them to Ethereum in batches by trusted solvers, effectively reducing the risk of MEV attacks such as front-running and pincer attacks. In addition, the protocol has strict restrictions on solvers' quote slippage and execution results, which compresses the space for miners and searchers to extract MEV from a mechanism perspective. These measures make Cow Swap one of the most user-protection-focused trading platforms at present. For large transactions and DAO vault managers, such MEV protection is very attractive.
2. Brand
As the first trading product to launch a batch auction matching and solver competition mechanism, coupled with its anti-MEV product characteristics, Cow Protocol's value proposition of security and cost-saving for traders has been deeply rooted in the hearts of the people. It has gradually become the first choice for large traders in their minds and will not change easily. Behind this user habit is the brand and reputation accumulated by Cow Protocol based on its products, which is also the source of the protocol's eventual profitability.
1inch’s monthly active users in the past year, data source: Tokenterminal
Cow Protocol’s monthly active users over the past year, data source: Tokenterminal
Main challenges and risks
Harsh competition
The competition in the aggregated trading track is fierce, with old projects such as 1inch, Kyber, and DoDo in the front, and new forces such as Bebop supported by Wintermute in the back. In addition, products such as CEX and wallets that are closer to users and have strong entry and front-end advantages, as well as chain abstraction products such as UniversalX, have also been actively exploring trading product innovations and striving for higher user penetration. In the long run, their relationship with Cow Protocol is "more competition than cooperation." Therefore, although Cow Protocol's market share has surpassed 1inch and jumped to the first place, it is not easy to maintain market share under such high-pressure competition, and it will directly suppress the bargaining power of the protocol with users and suppliers (solvers), causing an obvious contradiction between the two goals of "market share" and "protocol profit."
Market Cycles
The depression of the overall market cycle will cause the overall trading volume to shrink, which will have an impact on Cowswap's trading volume. This is self-evident. Other trading products are also affected by this, so I will not go into details later.
Binding with the EVM ecosystem
Currently, Cow Protocol only provides services in the Ethereum ecosystem. If the Ethereum ecosystem does not develop as well as other public chains, it will naturally inhibit the development of Cow Protocol. Uniswap, which will be mentioned below, also faces this risk, so I will not repeat it here.
Valuation reference
COW Token
The current total amount of Cow is 1 billion. According to Coingecko data, the current circulation ratio is about 41.5%, and there will be a 19.61% token circulation expansion rate in the next year.
Currently, the main use case of Cow’s token is governance. As subsequent protocol revenue increases, token repurchases may be carried out. Previously, attempts have been made to pledge Cow to reduce transaction fees.
Valuation
From the perspective of vertical valuation compared with its own, as business data continues to rise, Cow's FDV has also hit a new high in this round (excluding the outliers caused by the extremely low circulation rate of tokens in the first month of the project's issuance). The highest market value reached a peak FDV of 990 million at the end of December last year, and then fell sharply. It is currently about 280 million US dollars.
We compare Cow's PS value vertically by using the earnings multiples of FDV and protocol revenue:
As can be seen from the above figure, although Cow's FDV has been on an upward trend over the past year, its PS value has shown a significant decline as its business revenue has increased, making it more cost-effective than before.
From a horizontal comparison of competing products, 1inch is the most direct benchmark among comparable projects in the aggregator field. Considering that 1INCH currently does not have direct token value capture and the protocol does not have stable and public protocol revenue, we mainly compare the two protocols through the ratio of FDV to transaction volume.
As can be seen from the above figure, with the decline in Cow prices and the increase in business data, its market value\trading volume ratio has been lower than 1inch for the first time since February 25, and has a higher horizontal cost-effectiveness.
3.2 Uniswap
Business Status
Core Products
Uniswap is the largest decentralized exchange (DEX) on Ethereum. Its main products currently include its DEX protocol (now deployed on the Ethereum mainnet and multiple extended chains) and the recently launched Unichain exclusive Layer 2 network.
The fee switch mode of the Uniswap protocol has not yet been turned on, so the protocol itself has no direct income in the past (but Uniswap Labs charges a 0.15% interface service fee on some token transactions on its official front-end).
However, Unichain, which was officially launched in November 2024, will subsequently obtain a share of the transaction sequencer's fees by staking UNI, thereby directly distributing value to UNI holders without turning on the fee switch.
Business data
For Uniswap, the most important business data are transaction volume and Fee; for Unichain, we mainly focus on the number of active addresses on the chain, the main ecosystem, and the scale of funds on the chain.
DEX Trading Volume and Fee
Uniswap’s transaction volume and Fee, source: tokenterminal
Overall, Uniswap's trading volume continues to grow with the development of the market, and set new monthly trading volume records in March and December of the past year. However, as the market conditions have cooled recently, trading volume has dropped significantly.
It is worth noting that Uniswap's Fee indicator in this cycle has not yet surpassed the peak and sub-peak of the previous cycle, indicating that the fee ratio is declining as the cycle progresses and the competition among LPs is more intense.
Multi-chain data
Thanks to multi-chain deployment (currently covering 11 EVM chains), especially Base launched by Coinbase, the number of active users of Uniswap also hit a new high of 19 million in October last year. The growth rate of this business data far exceeded the growth of transaction volume, showing L2's ability to attract new users.
Multi-chain distribution of Uniswap’s monthly active addresses. Source: tokenterminal
Among them, Base is the main force of active users, accounting for 82% of Uniswap's active users in all chains.
Source: tokenterminal
However, in terms of transaction volume, Ethereum is still the main battlefield of Uniswap, accounting for about 62% of the transaction volume, followed by Arbitrum with 23%, and then Base with 8.4%.
Source: tokenterminal
Unichain’s business data
Since Unichain was officially launched in early February this year, its number of active addresses has increased rapidly. In early March, the number of weekly active addresses reached nearly 120,000, ranking 7th among all L2s, higher than well-known L2 projects such as zksync, Manta, and Scroll.
Source: tokenterminal
However, the value of Unichain’s bridged assets is still not high, currently only around 14 million US dollars.
Source: tokenterminal
In terms of ecology, Unichain has officially listed more than 80 ecological projects, but most of the actual businesses have not yet been officially launched. Taking Defi as an example, the only well-known application that has actually been launched, in addition to Uniswap itself, is Venus (total deposits of 5.67 million US dollars).
Competition
Uniswap still occupies the top position in the DEX market of the EVM ecosystem in the past year, and its overall market share still maintains the first place, but the overall trend of market share continues to decline. The figure below shows the market share trend of all DEXs in the EVM ecosystem (including all EVM L1 and L2).
Source: Dune
The second place is Pancakeswap, and the third place is Aerodrome, which are the head DEXs of Bnbchain and Base respectively (although Uniswap has also been deployed on these two chains).
Source: Dune
ETH, Bnbchain, and Base are also the three chains with the largest transaction volume in the EVM ecosystem, which is consistent with the market share ranking of Uniswap, Pancake, and Aerodrome.
As for Unichain, due to the short time it has been online, its ecology is still relatively weak and is in the cold start stage of application and funding. Except for the good growth in the number of active users, other business data are still far behind the mainstream L2.
Uniswap’s Competitive Advantage
Uniswap’s competitive advantages can be summarized as follows:
1. Network Effects and Liquidity Depth
The largest liquidity pool attracts the most traders, and vice versa, more traders and trading volume attract more tokens to deploy liquidity here, forming a self-reinforcing cycle.
2. Stickiness brought by brand and user habits
As the earliest project to promote the AMM model in the Defi field, Uniswap has the highest brand (including popularity and legitimacy) and reputation, and has a high mental position in the minds of both traders and liquidity deployers. Even now that Dex and various aggregators are very abundant, there are still many users who habitually trade on the front end of Uniswap, even though it charges an extra transaction fee. Uniswap's brand also played an important role in its construction of L2. At the beginning of L2's launch, it attracted many high-quality projects to test and join, and the user growth was also rapid.
3. Ecological positioning of multi-chain deployment
Uniswap has deployed its products on most mainstream EVM chains, and its trading volume ranks among the top three on most chains. This not only helps Uniswap maintain its basic position in the multi-chain era, but also lays the foundation for Uniswap's subsequent multi-chain aggregation trading function, making it easier to achieve multi-chain liquidity interoperability.
Main challenges and risks
Fierce competition and the impact of new models
Although Uniswap still has certain advantages in terms of market share, on the one hand, its traditional Ethereum competitors such as Curve are still holding their ground. On the other hand, Uniswap's breakthrough in other EVM L1&2 is not smooth, and each chain has its own strong local snake to compete with it (Bnbchain's Pancake, Base's Aerodrome, Arbitrum's Camelot, etc.).
What is more worthy of attention is the challenges posed by various emerging trading models: RFQ protocols (Request-For-Quote) and batch bidding matching models are on the rise. Projects represented by CowSwap allow market makers (solvers) to quote directly, improve the price efficiency of bulk transactions, reduce AMM slippage and MEV, and are favored by professional traders and whales, significantly diverting Uniswap's trading volume.
Although Uniswap later launched UniswapX with a similar mechanism, it has not slowed down the growth of projects such as Cowswap. In addition, products with obvious front-end advantages such as wallets and CEX have also focused on trading scenarios, trying to get into the upstream of user behavior, making Uniswap a more passive "price taker" facing brutal bidding competition.
Community governance is inefficient and tokens lack value hooks
Most investors who have been paying attention to the Uniswap governance forum for a long time will find that compared with other Defi projects with higher governance efficiency and better reputation (such as Aave), Uniswap's governance efficiency is very low, which is specifically reflected in the slow speed, waste of resources, and insufficient focus on strategic indicators.
Take a specific example:
1. The fee switch issue that the community is most concerned about has been discussed repeatedly for nearly 3 years, but there is no result so far;
2. Provide various donations and budgets to various research and organizations that have little to do with Uniswap’s North Star indicator (trading volume), but the results obtained are of little benefit to the project.
The low level of community governance, as well as the disregard and procrastination in pegging the Uni token value, will obviously have a long-term negative impact on the Uni token price.
Valuation reference
Since Uniswap has not yet obtained formal protocol revenue, and Unichain's Fee is so small that it is basically negligible compared to its market value, we use the ratio of Uniswap's market value and its Fee (PF) to make a vertical and horizontal valuation comparison.
Source: tokenterminal
In vertical comparison, Uniswap's PF in February this year was 6.77, which is at an absolute historical low. Since Uniswap issued the token, there have been only three months with lower indicators in history, namely May-June 2022 (Three Arrows Thunderbolt), and April 2024 (Altcoin callback + Uniswap received the SEC's Wells Notice). In March, the indicator rose slightly to 7.26. Judging from this indicator, the market is obviously extremely pessimistic about the prospects of Uni tokens.
Source: tokenterminal
For horizontal comparison, I chose Pancake and Aerodrome, which are also DEX projects and have a market share second only to Uniswap. The reason why I did not choose Curve is that in addition to DEX, it currently has a main business of lending, which is not very comparable with the first three.
Judging from the PF indicators of the three, it seems that Uniswap's valuation is significantly higher than Pancake and Aerodrome. But we need to consider two more factors:
Uniswap has not conducted any token subsidies, while Pancake and Aerodrome are still conducting relatively large-scale token subsidies, especially Aerodrome, whose token incentive value in February was as high as 27 million US dollars (see the figure below)
Uniswap and Unichain, the second growth curve, have a better multi-chain ecosystem. Although Pancake has also been deployed on multiple chains, its operation is far behind Uni. Aerodrome is a single-chain DEX.
Overall, even considering the similarities between Uniswap, Pancake, and Aerodrome’s businesses, the reference value of their PF horizontal valuation comparison is weaker than that of vertical comparison.
3.3 Jupiter
Business Status
Starting from aggregated transactions, Jupiter has formed a full-link layout around Solana chain transactions through continuous product expansion and mergers and acquisitions, and has expanded horizontally to other chains and ecosystems. The main products in the Jupiter system include:
Main Station Proprietary Trading Products: Including Instant, Trigger and Recurring, which are the earliest products launched by Jupiter and the most popular products. The number of transactions per day hit a record of 57 million on January 20.
Source: Dune
The main site's Trenches product, previously known as Ape.pro, is a specific product tool for Meme, which is consistent with the product form of typical meme trading tools such as Phonton/GMGN. However, at the end of February, after ape.pro was merged into Trenches, its product form was not much different from Jupiter's aggregate trading product form.
The core product logic of the main site's Perps product is similar to that of GMX, providing leveraged long and short positions and yield farming for BTC, ETH, and SOL. The peak TVL of this part exceeded 2 billion US dollars, which is the main component of Jupiter's TVL. The average daily trading volume during the peak period was also close to 1 billion US dollars, which was the main cash flow business of Jupiter in the early days.
Jupiter Derivatives Exchange TVL (left axis) and trading volume (right axis) Data source: DeFillama
The above can be regarded as Jupiter's main products at present. In addition, the Jupiter system also has the following products:
Meme trading platform Moonshot. In January 2025, Jupiter announced that it had acquired a majority stake in the meme trading platform Moonshot.
Moonshot is a meme trading platform that has emerged in the past six months. With its smooth fiat currency deposit system and simple and smooth transaction process, it has attracted many users to trade and created the Moonshot listing effect, especially when TRUMP was launched.
Moonshot’s transaction volume (left axis) and fees (right axis) Source: Dune
Liquidity platform Meteora.
Meteora was founded by one of Jupiter's early co-founders (Ben Chow). Although it has no clear control relationship with Jupiter, it is also regarded as an important part of the Jupiter ecosystem. However, Meteora will issue its own tokens in the future. Although Meteora belongs to the Jupiter ecosystem, its relationship with the JUP token is more circuitous.
LST product jupSOL, jupSOL quickly occupied a considerable market share after its launch in 2024. Currently jupSOL is the fourth after jitoSOL, bnSOL and mSOL
Solana LST market share (the gray block above is jupSOL) Source: Dune
Launchpad LFG, in addition to the JUP token itself, LFG also launched the governance token ZEUS of the cross-chain communication protocol zeus, the governance token CLOUD of the LST protocol Sanctum, and the governance token DBR of the cross-chain protocol debridge, as well as several other meme projects in 2024. Although there are fewer projects launched, the quality is relatively high.
Jupiter Portfolio, an investment portfolio management platform. In January this year, Jupiter officially announced the acquisition of the on-chain portfolio tracker Sonarwatch, and officially launched Jupiter Portfolio on January 30. Jupiter Mobile, a mobile wallet, launched its mobile wallet after acquiring Solana's mobile wallet Ultimate Wallet.
The full-chain network Jupnet was launched at the end of January this year. Its goal is to enable one account to access all chains, all currencies, and all commodities. However, there is no experiential version directly targeting C-end users. The trading terminal Coinhall was acquired by Jupiter in September 2024 and mainly provides transactions for Cosmos ecological tokens. Through the acquisition of Coinhall, Jupiter gained the ability to build its own trading terminal, and the construction of its Trenches product relies on this ability.
Currently, on-chain transactions of Cosmos ecosystem tokens are not frequent, with an average daily transaction volume of less than US$10 million.
Source: Coinhall
In addition to the above-mentioned C-end products, Jupiter has many other actions, such as acquiring Solana's browser SolanaFM. And they also have many products in the planning, such as the full-chain network Jupnet.
From the perspective of product layout, Jupiter, as Solana's largest C-end traffic entrance, covers almost all business directions except lending. Even in Solana, where the "mixed business" trend is very obvious, Jupiter's business tentacles are still the most extensive. In addition to self-operation, they also expand their business boundaries through relatively aggressive acquisitions.
Profit Model
Jupiter's current fee-based services include:
Aggregate trading business (including Trench) charges 0.05%-0.1%, spot orders and DCA charges 0.1%, and derivative business refers to the mechanism of GMX, with the main charges coming from a 0.06% handling fee when opening and closing positions, in addition to borrowing fees, price impact fees, etc. However, not all the fees for derivatives go to JupiterDAO, but 75% of the fees are allocated to its liquidity provider JLP, and the remaining 25% is withdrawn by JupiterDAO. There is no charge for other businesses.
Token Incentives
Jupiter has no daily token incentive plan, and its main incentives come from two rounds of retroactive airdrops.
Competition
Trading is the core service provided by Jupiter. Other businesses such as LST, Launchpad, and wallets can be regarded as the reuse of traffic brought by trading to some extent, so we mainly analyze Jupiter's competition in aggregated trading and derivatives trading.
Aggregate Trading
In the competition for Solana's trading portal, Jupiter quickly surpassed Orca and Raydium in the first half of 2024 with its aggregator's multi-liquidity pool routing features and excellent user experience, and is in an absolute dominant position (accounting for 51% of Solana's transaction sources in 24Q2, source: Messari).
However, with the popularity of meme and Pump.fun, trading tools specifically targeting meme, such as Photon, Trojan, Bullx and GMGN, quickly encroached on Jupiter's share at the trading entrance level. They focused on faster trading speeds and more comprehensive meme trading auxiliary functions, becoming more recognized by the market as "Meme trading entrances". Jupiter launched a similar tool, ape.pro, in October last year, but the market response was muted, and it was eventually merged into the main site's Trenches product. This is reflected in the data, that is, Jupiter's share of Solana's trading sources in 24Q5 fell to 38% (Source: Messari)
Meme transactions accounted for 90% of Solana network transaction volume during the boom. The division of meme transaction entrances is the biggest problem Jupiter faces at the aggregate transaction level.
Derivatives Trading
Jupiter's derivatives exchange is already the second largest derivatives exchange on all chains, with trading volume second only to Hyperliquid, which we will introduce in the next article. Specifically on the Solana chain, Jupiter has a clear advantage over its main competitor Drift, and its trading volume is roughly 5-10 times that of Drift in recent times.
7-day derivatives exchange trading volume ranking Source: DeFillama
In terms of DAU, the gap between the two is also close to an order of magnitude in the past month.
Data source: Dune
In the field of derivatives trading, Jupiter's position on the Solana network will be difficult to shake in the short term.
Main challenges and risks
Despite launching Jupnet to expand its full-chain business, Jupiter’s current core business is still on Solana. For Jupiter, the biggest unknown is whether the Solana network can maintain prosperity and maintain active on-chain transactions.
In addition to the above-mentioned challenge of unfavorable competition in Meme trading portals, Jupiter faces other challenges and risks including:
Business expansion is too radical, and the effect is questionable
Jupiter's business expansion is much more radical than most Web3 projects. They have a grand business vision and have frequently expanded their business boundaries through acquisitions over the past year. However, many acquisitions have not achieved the expected results, such as the acquisitions of Moonshot and Coinhall.
Compared to the highest daily trading volume of $660 million and revenue of $10 million in January when it was acquired, Moonshot's daily trading volume has now dropped sharply to less than $5 million, and its revenue does not exceed $10,000. Although Jupiter did not disclose the acquisition price and the cost paid, for JUP token holders, acquiring Moonshot today will obviously cost less.
Moonshot’s transaction volume (left axis) and fees (right axis) Source: Dune
The acquisition of Coinhall helped Jupiter build the capabilities of its meme trading product Trenches. However, from the current actual situation, Trenches products still have a large gap in terms of both trading volume and popularity compared with the leading meme trading products such as Photon, Bullx, Trojan, GMGN, etc.
No self-built liquidity pool
Jupiter does not have its own liquidity pool. The Metrora it supports has already launched a points program and is expected to start an independent token issuance process, which means that JupiterDAO or JUP tokens cannot capture the transaction fees of the "token trading in the liquidity pool" step, and this part of the fees supports Raydium's business revenue of more than US$22 million in January this year.
Untested by a bear market
In a bear market, many logics that are common in a bull market will be broken. For example, the current Solana chain meme trading users are generally very willing to pay. They have almost no reaction to the 0.05% fee required by Jupiter's aggregated transactions, because the meme tools of competing products charge 0.5% or even 1%. However, in a bear market, after the trading enthusiasm decreases, users will also be more sensitive to transaction fees, and Jupiter may also fall into the contradiction between the two goals of "market share" and "net profit".
In addition, Jupiter's current product line includes businesses that are difficult to generate revenue in the short term, such as wallets, the full-chain network Jupnet, and the investment portfolio management tool Jupiter Portfolio. There are also big questions about whether it can maintain such a large product line in a bear market.
Valuation reference
The total amount of JUP is 10 billion. At the end of January this year, 3 billion were voted to be destroyed. The current maximum tradable tokens are 7 billion, and the actual circulation is 2.63 billion, with a current circulation ratio of 38.5%. Among the current uncirculated tokens, 810 million team tokens will be initially unlocked in the next 21 months, and another 700 million tokens will be released in the Jupiter airdrop in January next year. The inflation rate in the next year will exceed 40%, and JUP is still a low-circulation and high-inflation token.
Current distribution of JUP tokens Source: Jupiter Governance Forum
At the end of January, Jupiter announced that it would use 50% of the protocol revenue to repurchase JUP, and the repurchased JUP would be locked for 3 years.
The figure below is the statistics of Jupiter protocol revenue since October last year compiled by DeFillama (the statistics of Jupiter aggregator revenue on February 10 and March 10 may have errors, but the author has not found other data sources for Jupiter revenue statistics). It can be seen that Jupiter's current main revenue still comes from derivatives trading (blue columns). Of course, this is related to the fact that the enthusiasm for Meme trading had dropped significantly when the Jupiter aggregator charging was launched.
Data source: DeFillama
Since Jupiter just completed a major economic model update at the end of January and charged 0.05%-0.1% for aggregated transactions, the P/S data with more reference value are those in February and March.
According to Jupiter's revenue data collected by DeFillama, Jupiter's revenue in February was US$31.7 million, with an annualized revenue of US$380 million, corresponding to a PS (circulation) of only 3.65 and a PS (full circulation) of 9.5; while the revenue as of March 18 was US$12.25 million, with an annualized revenue of US$253 million, corresponding to a PS (circulation) of 5.45 and a PS (full circulation) of 14.15.
Source: DeFillama
Whether comparing it horizontally with Cowswap mentioned above or vertically with Jupiter itself, JUP's current valuation appears to be relatively low.
Of course, the above data are all based on the craze for Solana. As Solana’s popularity further decreases in the future bear market, it will be very difficult to maintain such high income. We have already seen this in the data trend in March compared to February.
