This project is undeniably the heart and soul of the Solana ecosystem, serving as the leading decentralised exchange (DEX) aggregator. By seamlessly merging liquidity from multiple DEXs, this asset delivers lightning-fast, efficient trades powered by its native token. Let’s explore why we are bullish on its pivotal role in shaping Solana’s DeFi future…

Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.

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What is Jupiter?

Jupiter is a backbone of the Solana ecosystem, reigning as the main decentralised exchange (DEX) aggregator. Its prowess allows it to stand shoulder-to-shoulder with centralised exchanges, showcasing its ability to offer robust and competitive services.

Beyond basic trading, Jupiter extends its capabilities through a diverse suite of tools, including limit orders, dollar-cost averaging (DCA), value averaging (VA), and a perpetual trading platform catering to both novice and experienced traders alike. The platform also encompasses a launchpad and a derivatives platform, broadening its appeal and utility within the crypto industry. These additions enable users to engage with new token launches and complex financial products under the secure and efficient umbrella of Jupiter’s technology. As a result, Jupiter not only facilitates regular trading activities but also enhances users' investment strategies and exposure to innovative cryptocurrency ventures.

In a market where Solana dominates DEX volumes, the role of Jupiter becomes crucially significant, solidifying its position at the forefront of decentralised trading. As Solana's prominence grows, so too does the importance of Jupiter's native token, JUP. Our quantitative analysis revealed that the token acts as a strong beta asset for SOL, Solana's native cryptocurrency, indicating that JUP's performance is closely tied to that of SOL.

In good times for SOL, Jupiter, as the number one DEX aggregator, naturally follows its success trajectory. This connection makes JUP one of the strongest, fundamentals-driven assets within the crypto market.

The value of JUP stems directly from how well the Jupiter platform operates and performs, embedding it with intrinsic stability that appeals to value-based investors.  Considering Jupiter's critical infrastructure role within the Solana ecosystem, it's hard not to maintain a bullish outlook on JUP. 

Key features and innovations

Here are the key features and products Jupiter offers.

DEX aggregator (Swaps)

The core of the Jupiter platform is the DEX aggregator. It focuses on providing the best trading experience for Solana users. The primary function is aggregating liquidity from various DEXs and automated market makers (AMMs) such as Raydium, Serum, Orca, Saber, and others to offer users the best token swap prices and routes. 

Using Jupiter's DEX aggregator for normal swaps is free of charge and probably one of the best spot trading experiences in the DeFi, and is the backbone of trading in the Solana ecosystem.

Limit orders

Jupiter's limit orders allow you to buy or sell any token pair according to your specified price limit. They provide the easiest way to place limit orders on Solana, offering the widest selection of token pairs and leveraging all the available liquidity across the entire Solana ecosystem. The feature aims to emulate the UX of centralised exchanges, allowing traders to buy/sell crypto at specific price points.

Dollar-cost-averaging (DCA) and value-averaging (VA)

Jupiter also offers innovative features like dollar-cost averaging (DCA) and value averaging (VA), which are specifically designed to help less-experienced users embark on their crypto journey safely and without stress. These tools make it easier for newcomers to enter the crypto with confidence.

Dollar-Cost Averaging (DCA): The DCA feature on Jupiter allows users to set a fixed interval and period for their investments, automatically purchasing tokens at regular intervals. This approach is ideal for individuals who may not have the time to monitor market charts constantly. By spreading purchases over time, DCA reduces the impact of market volatility and helps investors avoid the pitfalls of trying to time the market.

Value Averaging (VA): Value averaging takes a slightly different approach by adjusting the amount invested based on a target growth trajectory. Instead of investing a fixed amount, VA calculates the investment needed to reach a predetermined portfolio value at each interval. This method can help users buy more during market dips and less when prices are high, potentially enhancing returns over time.

These features are instrumental in onboarding many new users to the Solana blockchain. By simplifying the investment process and reducing the risks associated with emotional decision-making, Jupiter empowers users to participate in the crypto market with ease and confidence. Thus, Jupiter not only encourages individual financial growth but also drives broader adoption of blockchain technology, pushing the boundaries of what is possible in the industry.

Jupiter perps

Jupiter Perps allows users to trade perpetual futures contracts with up to 100x leverage. This feature provides traders with the ability to speculate on the price movements of various assets without the need to own the underlying asset. Since its launch in February 2024, Jupiter's Perpetuals Exchange has quickly gained popularity, becoming the largest on Solana.

The platform ensures zero price impact, zero slippage, and deep liquidity, making it an attractive option for traders looking to take advantage of the volatile cryptocurrency market. Jupiter Perps offers a wide range of trading assets, including SOL, BTC, and ETH. In terms of fees, Jupiter Perps has been compared to Binance Perps, with a report by Gauntlet highlighting the competitive nature of Jupiter's current fee structure. 

The platform is constantly working on improvements to enhance speed, stability, and better economic alignment between liquidity providers and traders.

Jupiter launchpad

Jupiter LFG Launchpad is a platform designed to facilitate the launch of new projects and tokens in the crypto ecosystem. It aims to provide a fair and transparent environment for project teams and investors while protecting users from scams and rug-pulls. 

It is innovative and aims to improve the crypto project launch experience for project teams and investors. By leveraging the power of the Solana blockchain and the Meteora DLMM technology, the platform offers a fair, transparent, and efficient way to launch new projects.

Jupiter liquid-staked token

Jupiter has significantly expanded its ecosystem by integrating both innovative products and unique cryptocurrency assets, such as JupSOL, its proprietary liquid staking token (LST).  This offering enables users to stake their SOL tokens in exchange for JupSOL, which effectively represents the original staked SOL.

One of the standout features of JupSOL is its ability to provide one of the highest yields while maintaining a zero-fee structure, which is notably rare among liquid-staked tokens. This fee-free approach is possible because as more capital is staked with Jupiter validators, it enhances the overall transaction success rates on the Jupiter platform.

This increase in staked capital allows Jupiter to more rapidly validate transactions related to its platform, thereby ensuring a smoother user experience. The complete yield generated is passed on to the holders of JupSOL, affirming Jupiter’s commitment to maximising user benefits within its growing ecosystem.

Team behind Jupiter 

Jupiter was founded by an individual who goes by the pseudonym "Meow" on social media. Here is his account on Twitter. Technically, he has been doxxed by appearing on numerous podcasts and Twitter spaces, and we know he has a great experience in the blockchain industry. He was the lead adviser at Instadapp, Kyber and Blockfolio and co-founded wBTC, the largest wrapped token in crypto. He was one of the founding contributors to Handshake as well.

The team behind the Jupiter project has been described as a "four-person core team." Although specific details about the team members are limited, their track record of developing some of the most groundbreaking products in the industry speaks volumes about their expertise and innovation.

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Bullish case for JUP

JUP is strategically positioned to capitalize on Solana's rapid growth and increasing market presence. Currently, Solana holds about 2.6% market dominance, but we can expect a potential surge to 10%-15% due to technological superiority (faster and cheaper transactions) compared to peers like Bitcoin and Ethereum. 

Huge volumes and increasing growth

Jupiter has consistently demonstrated impressive trading volumes, which is a strong indicator of user trust and platform efficiency. To date, it has facilitated over $250b in volume, which is an astronomical number for a dex-aggregator.

High trading volumes not only reflect active participation but also ensure liquidity, which is crucial for minimizing slippage and ensuring smooth transactions. The increasing trend in volume highlights Jupiter's growing popularity and adoption, signalling a positive trajectory for future growth. This surge in activity reflects a broader acceptance and trust in the platform's capabilities, further solidifying its position as a leading trading solution.

Great migration

The primary reason for the increasing popularity of DEXes is the enhanced security and control they offer.  Unlike centralised exchanges (CEXes), where funds are held in third-party wallets, DEXes enable users to retain control of their private keys. This decentralised structure significantly reduces the risk of hacks and fraud, as there is no single point of failure. Additionally, DEXes often provide a broader array of tokens, including newer and less common assets that may not be available on centralised platforms. You wouldn't be early for this cycle of plays like WIF, POPCAT and SPX if you waited for them to be listed as CEXes.

On the other hand, CEXes, despite their convenience, have faced challenges related to regulatory scrutiny, security breaches, and operational inefficiencies. These issues have prompted users to seek alternatives that offer greater security and lower fees. Jupiter, with its efficient trading infrastructure, stands to benefit from this migration as it can handle a high volume of transactions swiftly and cost-effectively. Further, this trend toward decentralisation aligns with the broader values of the crypto community, which prioritises financial sovereignty and inclusivity. As users become more aware of the advantages of decentralised trading platforms, the adoption of DEXes like Jupiter is expected to accelerate.

Over the past years, the DEX to CEX spot trade volume ratio has risen from 0%  to approximately 14%, highlighting a growing preference for on-chain transactions. This trend suggests a burgeoning migration as users seek the autonomy, security, and transparency offered by DEXes.

Given this momentum, we project that more than 50% of trading volume could transition to on-chain activities within the next 3-5 years. Therefore, the ongoing migration and growing adoption are bullish for Jupiter, suggesting a significant upside for the platform in terms of addressable market.

Beta asset for Solana

JUP serves as a strong beta asset for SOL. We expect Solana to continue to outperform the broader crypto market and to be among few winners in Layer -1 category. Therefore, since we are bullish on SOL, we consider JUP as higher risk higher reward play, and our quantitative analysis supports that.

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Jup’s valuation exercise + price targets

Since there isn’t enough price data for JUP to value the asset, we relied on our valuation of Solana. JUP acts as a strong beta; therefore, basing our valuation of JUP on SOL is a plausible way to determine what to expect from the asset.

For 24/25

Methodology: we take our bullish scenario targets for SOL, and use all-time highs (ATH)

We can see from the chart that 0.009 was an ATH. Now, these are our bullish and bearish scenarios. Taking the average of these two would give us 0.0065 as our base scenario. Based on our thesis, we expect $527 per coin as our bullish scenario for SOL.

Thus, here are our targets based on these scenarios

• Bearish case: In our bearish scenario, we expect JUP to be worth around $0.4 per JUP based on technical analysis.
• Base case: Our base scenario suggest that JUP/SOL ratio will hit at 0.0065 in a good market environment. Therefore, we expect $527 x 0.0065 = $3.43 per JUP.
• Bullish case: The bullish case for JUP suggests its ratio to SOL will reach ATH again at 0.009. Thus, we expect $527 x 0.009 = $4.75 per JUP in this scenario.
• Best case: In this scenario, the market can exceed our expectations and things that we previously didn’t consider come up or believed were low-likelihood events. To account for this scenario, we are doubling our bullish scenario to account for euphoric scenarios where things can get crazy. Thus, we expect $9.5 per JUP in our best case scenario.

Our bullish and best cases are for the longer term targets as we remain quite bullish on the main dex aggregator of Solana. For the shorter term, our definitive targets are based on technical analysis:

We think once JUP reclaims the $0.44 it opens a door to test range highs, which is north of $1.87. Given we will move from risk-off environment to risk-on in the coming months, we expect JUP to reclaim the range and push towards its range-high/all-time highs. Therefore, our year end target for JUP is around $1.87

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Risks to consider

Solana losing mindshare: The performance of Jupiter is inherently tied to the performance of the Solana ecosystem itself. As an L1 blockchain, Solana's success in maintaining a dominant position in terms of volume, user base, and overall market sentiment is crucial for the prosperity of platforms like Jupiter that serve as a crucial piece of infrastructure for the Solana ecosystem. However, if the narrative shifts from Solana and it loses popularity from users and investors, Jupiter would be a huge hit because of decreased volume and interest. Therefore, it is important to monitor variables such as Solana’s popularity, price action, DEX volumes and number of users.

Memecoins losing hype: Furthermore, the majority of volume and hype in the Solana ecosystem comes from memecoin trading. Memecoins are the hottest sector in crypto this cycle. However, they don’t have an intrinsic value in the traditional sense of the word. The price goes up and down based on speculation. Despite the lack of “fundamentals”, some memecoins became a hot narrative due to their inherent advantages such as fair distribution, purity and social commentary. If the memecoin narrative loses steam, that can potentially hit the popularity of Jupiter, decreasing volumes and sentiment around Solana.  

CEX to DEX volume shift stagnating

As we mentioned earlier, the migration of trading volume from centralised exchanges to decentralised exchanges has been a prominent trend in the crypto industry. This shift reflects a growing preference among users for the autonomy, security, and transparency that DEXes offer compared to their centralised counterparts. The core appeal lies in on-chain transaction's ability to mitigate the risks associated with CEXes, such as counterparty risk, hacking, and mismanagement of funds. Decentralised platforms allow users to retain full control over their funds, executing trades directly from their wallets without the need for an intermediary. This fundamental shift in how transactions are managed addresses many of the vulnerabilities that have plagued CEXes over the years. 

However, despite these advantages, there are several factors that could hinder the predicted dominance of DEXes. One significant barrier is the current state of user experience on many DEX platforms. The complexity of managing one's own wallet and understanding the mechanics of smart contracts can be daunting for average users. This complexity, coupled with often managing gas fees, network congestion and scam transactions, makes DEXes less appealing to the mainstream market. Therefore, there is a risk that the CEX to DEX trend might stagnate if technical barriers and engineering problems that make the DEX experience better aren’t solved in the near future.

Regulatory risks

DEXes often fall outside the scope of traditional financial regulatory frameworks due to their decentralised nature. This lack of clarity can lead to uncertainties in compliance, making it difficult for DEX operators to ensure they are following local laws.

In addition, traditional exchanges are required to implement Anti-Money-Laundering (AML) and Know-Your-Customer (KYC) procedures to prevent money laundering and terrorist financing. DEXes, which often do not require user identification, can be seen as vulnerable to misuse for such activities. This absence of identity verification poses significant challenges in complying with AML and KYC regulations.

Furthermore, many tokens traded on DEXes might be classified as securities by regulators like the U.S. Securities and Exchange Commission (SEC). Operating without a proper framework for securities trading could expose DEX operators and users to legal risks.

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How to buy JUP

1. Buying on a Centralised Exchange

• Step 1: Choose a centralised exchange
  • Popular centralised exchanges that list JUP include Binance and Kraken.
• Step 2: Create and verify your account
  • Sign up for an account on the chosen exchange and go through the verification process,
• Step 3: Deposit funds
  • Deposit funds into your exchange account. You can typically use bank transfers, credit/debit cards, or cryptocurrency transfers.
  • Check the exchange's supported payment methods if you are depositing fiat currency (like USD or EUR).
• Step 4: Buy JUP
  • Navigate to the trading section of the exchange.
  • Search for the JUP trading pair (e.g., JUP/USDT, JUP/SOL)
  • Decide on the amount of SOL you want to purchase and choose between a market or limit order.
    • Market order: Buy JUP at the current market price.
    • Limit order: Set a specific price at which you want to buy JUP. The order will be fulfilled once the market reaches your specified price.
  • Review the order details and confirm the purchase.
• Step 5: Withdraw JUP to your wallet
  • After purchasing JUP, it's a good practice to withdraw the tokens to a secure wallet like Phantom for safekeeping.

2. Buying via Phantom Wallet

• Step 1: Install Phantom Wallet
  • Download and install the Phantom wallet extension for your browser from the official Phantom website.
  • Create a new wallet or import an existing one using your recovery phrase.
• Step 2: Secure your wallet
  • Write down and securely store your recovery phrase. This phrase is crucial for recovering your wallet in case of loss or device failure.
• Step 3: Fund your Phantom wallet
  • Deposit SOL directly into your Phantom wallet by transferring it from a centralised exchange where you've purchased JUP.
  • Alternatively, deposit other Solana-supported tokens stablecoins like USDC or USDT if you plan to swap them for JUP.
• Step 4: Use the built-in swap feature
  • Open the Phantom wallet and navigate to the "Swap" tab.
  • Choose the token you wish to swap (e.g., USDC) and select JUP as the output.
    • Alternatively, enter JUP' contract address: JUPyiwrYJFskUPiHa7hkeR8VUtAeFoSYbKedZNsDvCN
  • Enter the amount you want to swap and review the transaction details, including the estimated network fees.
  • Confirm the transaction and approve it within the Phantom wallet.
• Step 5: Verify the transaction
  • Once the transaction is complete, you'll see the updated JUP balance in your Phantom wallet.

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Cryptonary’s take

Jupiter is quickly becoming a cornerstone of the Solana ecosystem, cementing its position as a leading decentralised exchange aggregator renowned for its robust features and expansive ecosystem. As the largest spot DEX aggregator and one of the top perpetual DEXes on Solana, Jupiter is instrumental in enhancing the platform's liquidity and trading dynamics.

The platform is not just growing; it's thriving. Its strong fundamentals are evident in its increasing volume, surging user base, and positive market sentiment—all trending upwards. This trajectory demonstrates Jupiter's role as a vital asset in the Solana space, particularly noted for its resilience and potential as a beta asset. Our quantitative analysis revealed that it is one of the strongest beta plays for Solana in DeFi. And if you are bullish on SOL, you can’t be not bullish on JUP. We remain highly confident in JUP’s future and see it as one strongest “fundamental” assets in the market right now.

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