The crypto community is discussing criticism of the JUP token support model by user fabiano.sol. He argues that the problem is not the buybacks themselves, but the lack of a long-term, clear value narrative that would give holders a reason to keep JUP. Without such a narrative, buybacks and burns create liquidity for sales but do not guarantee sustainable price growth.
Criticism of the Current JUP Token Support Model
According to fabiano.sol, buybacks do not address the root problem: investors lack a clear ownership narrative for JUP and how Jupiter's product success should translate into asset price growth. The author notes that without such an explanation, any buyback mechanisms merely facilitate capital outflows without creating long-term demand.
At the same time, Jupiter itself, according to the critic, has one of the strongest teams and some of the best products in the Solana ecosystem, but this is not directly reflected in the token's role. More details on the Solana ecosystem can be found in the key takeaways on SOL, which provide an overall picture of the platform.
Current Reward Distribution System
Currently, about 50 million JUP, equivalent to roughly $10 million, are distributed quarterly as staking rewards; these tokens come from unclaimed ASR, Jupuary, and other programs. The author observes that a significant portion of recipients immediately sell their JUP to cover expenses or losses, creating additional downward pressure on the price.
Simultaneously, Jupiter allocates about 50% of its revenue to buybacks of JUP for Litterbox, purchasing tokens worth $10–20 million per quarter. Under these conditions, the critic suggests reconsidering the protocol's revenue spending priorities, as the current scheme coincides with regular reward emissions.
Proposed Change to the Token Support Model
Fabiano.sol proposes redirecting a significant portion of funds directly into staking rewards instead of mass buybacks. According to his calculations, this redistribution could provide around 25% APY at current prices, increasing incentives for long-term token holding rather than quick selling.
The author emphasizes that deflationary mechanisms—buybacks and burns—become effective only after the token develops a clear value narrative and the market begins to factor in supply reduction. At present, in his view, JUP has not reached this stage.
Why This Matters
If you mine with one or multiple devices and receive JUP as a reward or consider it part of your portfolio, it is important to understand that regular quarterly distributions and subsequent sales by holders create constant downward pressure on the price. Even with active buybacks by the protocol, this pressure can offset the effect if the token lacks a strong foundation for long-term holding.
For miners in Russia, this means receiving or holding JUP should be done with awareness of liquidity and potential volatility: tokens received may be worth less by the time of sale if a large share of rewards floods the market. Therefore, deciding whether to sell immediately or stake should be made with knowledge of the distribution and buyback mechanisms.
What to Do?
Brief practical steps for miners with 1–1000 devices—what to check and how to act to reduce risks related to the JUP token.
- Track reward flows: know that about 50 million JUP are distributed quarterly and factor this into your sales or holding plans.
- Do not rely on buybacks as a price guarantee: consider that protocol buybacks occur alongside reward emissions and do not always offset recipient sales.
- Consider staking instead of immediate selling if it fits your strategy and conditions allow—the proposed redistribution could increase APY for stakers.
- Calculate in real currency terms, including fees and taxes, before automatically selling received JUP to cover mining costs.
- Follow Jupiter's announcements on revenue distribution and changes in ASR and Jupuary programs to adapt your strategy timely.