Jupiter Exchange Halts JUP Buybacks, Pivots to Growth After $70M Fails to Stem Price Drop

Source: DefiPlanet Original Title: Jupiter Exchange Halts JUP Buybacks, Pivots to Growth After $70M Fails to Stem Price Drop Original Link:

Quick Breakdown

• Jupiter spent over $70 million on JUP token buybacks, using 50% of protocol fees, yet the price fell nearly 89% from its peak to a range of $0.20-$0.22.
• Monthly unlocks of 53 million JUP through June 2026 overwhelmed repurchase efforts, adding steady sell pressure despite high trading volumes.
• Core team slashed the 2026 airdrop from 700 million to 200 million JUP tokens; co-founder Siong Ong proposes redirecting funds to user rewards and development.

The Buyback Challenge

Jupiter Exchange executed an aggressive buyback program throughout 2025, using about half its fee revenue to buy back JUP tokens. The program handled billions in transactions, but it did not help the price because the token supply kept growing quickly. Since launch, the circulating supply rose by 150%, as scheduled unlocks were faster than repurchases, which kept pushing the price down.

Solana co-founder Anatoly Yakovenko pointed out that when token emissions are high, these models work better for long-term capital strategies than for short-term buybacks. Co-founder Siong Ong started a community debate by questioning how effective the buyback approach was and suggested focusing more on platform incentives.

Protocols should actually stash the cash for a future buyback. This would force all the unlocks to trade at the future expected post buyback price.

Price Pressure and Supply Dynamics

Despite the exchange’s activity, the JUP token’s price action indicated trouble. By early January 2026, JUP was trading around $0.20-$0.22, a drop of nearly 89% from its peak. This significant decline was primarily attributed to the rapid growth in supply, rather than a lack of platform usage.

The core issue is that JUP’s circulating supply has surged by approximately 150% since its launch. Because token unlocks continue on a fixed schedule, the buyback program has been largely ineffective, offsetting only a minor portion of these newly released tokens.

Given the scheduled monthly unlock of approximately 53 million JUP through June 2026, consistent selling pressure is inevitable, irrespective of the protocol’s performance. Ong recognized that in this context, buybacks serve only as a short-term buffer rather than a sustainable long-term support mechanism. Consequently, he argued that continuing to allocate capital to buybacks would be inefficient and proposed a strategic pivot to focus on growth incentives instead.

Solana Ecosystem Feels Ripple Effects

The rethink arrives as Jupiter handles massive Solana activity, including recent real-world asset tokenization surges. The community is divided, with some supporting buybacks for alignment and others wanting to focus on growth. This reflects a wider trend on Solana, where projects try to balance high throughput with token economics, especially as more institutions adopt blockchain for settlements.