Jupiter's JUP increases with Solana pioneer supporters
Jupiter's JUP token reached billions of dollars in trading volume and attracted thousands of holders just days after a massive $700 million airdrop to users in the Solana ecosystem. This has caused some concerns about their distribution mechanism.
At the time of writing, JUP was trading at $0.60, giving it a market capitalization of over $800 million. Jupiter is a decentralized exchange (DEX) that routes orders to several other exchanges at Solana and executes the best available price for an asset.
On Wednesday, the DEX rewarded its users by airdropping JUP tokens, based on their activity on the platform. The project also offers tokens on the open market using a trading pool so investors can buy JUP and airdrop recipients can sell newly minted tokens.
According to the technical document, the trading pool allows Jupiter to offer tokens within a specific price range, where price action is driven by market forces and the level of liquidity the platform attracts over time.
However, the tactic drew the ire of some market observers who likened the pool sale to an IDO, rather than an airdrop. In an airdrop, a platform rewards users by giving them tokens, while in an IDO, the developer team typically sells their holdings to market participants.
Jupiter's trading pool strategy is being criticized for being an IDO disguised as a fair market pool, with some observers claiming that the dev team sold over $200 million in JUP through the market pool .
The drama caused the price to slide to a low of $0.56 on Thursday.
But most of these allegations were dismissed by founder Jupiter Weremeow as "blatantly false" and said that many posts on X misrepresented the selling mechanism.
Another rumor then spread that Jupiter might remove the liquidity it was providing 7 days after issuance, leading some to call it “rug pulling.” However, the rumors were quickly quashed.
“The launch pool will exist for seven days to absorb any selling pressure from airdrops or buyer's remorse,” Meow said on Thursday. In my opinion, this period is enough. On the contrary, newly confident buyers also have a buffer against selling pressure."
In another post on X, he said all tokens in the pool will remain in the team treasury or be used to provide additional liquidity in the future. The sale itself serves as a testing platform for Jupiter's LFG launchpad, which is planned to allow the project to issue tokens to Solana users in the future.
Meanwhile, the Solana community has mostly expressed support for the token sale design and process – citing transparency and the absence of venture capitalists holding the tokens as two key advantages.
