JUP staking users are expected to renew a "guaranteed" return of 55% for another year.
By Azuma, Odaily Planet Daily
The largest decentralized exchange on Solana, Jupiter, is advancing its second major vote (J4J #2) regarding the disposal of its token JUP, with the voting results directly determining the disposal of approximately 215 million JUP (about $190 million).
In early August of this year, the Jupiter community passed the first major vote (J4J #1) regarding the disposal of JUP with a 95% approval rate, which decided to burn 3 billion JUP (30% of the total supply) to reduce Jupiter's maximum supply.
According to the plan mentioned by Jupiter's founder, meow, Jupiter plans to initiate three JUP disposal votes called J4J to address the issue of JUP's excessive FDV, establish the best transparency in token distribution, and allow the community to vote on the potential issuance of JUP.
The proposal currently being advanced is the second of these three important votes, namely J4J #2.
The background of this proposal is that earlier this year, Jupiter conducted an airdrop activity called Jupuary, and due to the fact that not all airdrops were claimed, there are still approximately 215 million (215,461,850.21) JUP remaining. Based on the current market price of about $0.88, the total value of this portion of JUP is as high as $190 million, which is an asset that cannot be ignored by any protocol.
Yesterday evening, Jupiter's founder, meow, initiated a governance proposal on how to dispose of these 215 million JUP on the governance forum. The proposal includes three disposal options:
- Use the tokens for the Active Staking Rewards (ASR) plan for the next year;
- Burn the tokens;
- Return the tokens to the community's multi-signature wallet.
Meow mentioned that the Jupiter team currently leans towards the first option because ASR has successfully proven to drive community participation in every proposal, discussion, and vote over the past few months, so investing funds in ASR can help the Jupiter community continue to grow.
In the following text, we will briefly summarize the specific scale of ASR and calculate the effect of the above options on the existing ASR plan's reward increase.
The so-called ASR, directly translated as "Active Staking Rewards," is a staking and governance reward mechanism designed by Jupiter to reward community members who stake JUP and actively participate in governance, voting, and discussions, encouraging them to more deeply integrate into the Jupiter ecosystem.
The rewards of ASR mainly consist of two parts: 0.75% of the LFG Launchpad fee (which consists of various tokens from specific LFG issuance projects) and 100 million JUP initial allocation provided by the treasury.
In early July, Jupiter distributed the first round of ASR rewards, totaling 50 million JUP, to all community users who voted on proposals from March to June this year. The ASR plan still has 50 million JUP remaining and plans to distribute it to community users who voted on all proposals between July 1 and September 30, starting in October.
Based on the results of the past two quarters, ASR has had a significant effect in incentivizing community activity.
As of the time of meow's post, a total of 585,000 addresses have staked 361 million JUP; after 12 rounds of voting since the launch of the plan, an average of 280 million JUP has been involved in each vote; and each governance page for the vote has seen a large amount of discussion and suggestions.
Therefore, in order to maintain the incentive of ASR, meow and the Jupiter team propose to continue using the aforementioned 215 million JUP for ASR rewards for the next year, releasing an average of 50 million JUP per quarter, with the remaining 15 million JUP temporarily returned to the treasury for future specific needs.
Based on the current scale of ASR staking, injecting 200 million JUP into the ASR incentive pool means that staking users with 361 million JUP can enjoy a guaranteed return of 55% over the next year - not including other earnings from the 0.75% LFG Launchpad fee.
Clearly, this proposal is sufficient to continue to ensure the attractiveness of the ASR plan, thereby maintaining the community's willingness to participate in the development of the Jupiter protocol.
It is for this reason that meow and other members of the Jupiter team openly support this proposal and call on the community to vote in favor.
However, this does not mean that this proposal will definitely pass. Among the other potential options listed by meow, the "direct destruction" option is also seen by some community members as more in line with the interests of all JUP holders, not just stakers. However, considering that the users participating in the vote are staking users directly linked to ASR incentives, the probability of the first option being approved is still greater.
According to the current schedule, the proposal will be voted on starting at 15:30 UTC on September 27 (23:30 Beijing time), and Odaily Planet Daily will continue to keep an eye on it.
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