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What is Jupiter on Solana?
People often search for the keyword “Jupiter Solana” when they are searching for “Jupiter on Solana”. In this article, we shall use the two interchangeably. Jupiter Solana or simply Jupiter is the biggest decentralized exchange (DEX aggregator on the Solana network.
Launched in 2021, it sources and provides liquidity to traders from multiple DEXs and AMMs. This way, they are able to get the best token swap and best slippage rates for their trades.
At the time of writing this blog post, the 24-hour volume on this aggregator is $3.78 b with a staggering cumulative volume of $2.28 trillion. Currently, its token named, $JUP, ranks among the top ten tokens of the Solana ecosystem in terms of the market cap.
Founded by Fabiano Solana, Rolex Gold, and Mei, Jupiter Solana is one of the most advanced swap aggregation platforms. This is evident in terms of the different DeFi products that it offers: Spot Orders, Limit Orders, Dollar Cost Averaging, Bridges, Futures Perpetuals, and Time-Weighted Average Price.
Why Jupiter Solana is a DeFi Game-Changer?
Jupiter Solana as an Aggregator
Being an aggregator is one of the prime features that give Jupiter its true identity. It is a high-performance platform that uses different tools to give its best performance as an aggregator. As mentioned earlier, it first compares the price of a crypto asset on different DEXs and then determines which one provides the lowest rates. It also splits a single order into multiple ones across these decentralized exchanges; this helps reduce slippage rates.
By minimizing the price impact, it provides slippage protection, which is particularly valid for large trades. It also optimizes the gas fees and provides efficient gas by routing a trade via optimal paths on the blockchain networks. The gas fee is a big issue for traders and by using this aggregator, they get an optimized price.
Jupiter Solana aggregator provides an advanced interface for carrying out trades that allows users a unified experience. Instead of jumping from one platform to the other, they get to trade from various exchanges, all in one place.
As a Liquidity Provider
Jupiter Solana provides a refined liquidity ecosystem. It aggregates liquidity from different exchanges. It leverages smart contracts to connect to exchanges and fetches liquidity pool data at regular intervals. The pool data may include reserves of tokens, their prices, their fees, etc. On receiving a trade request, it queries all of the available DEXs and compares prices and other parameters. By combining liquidity, the depth of the order book is increased. This way, transactions, especially the big ones, are carried out seamlessly.
Security at its Core
Security is an important aspect of this platform. Over Solana, it combines the best of the two consensus mechanisms, i.e. Proof of Stake and Proof of History. While employing PoS, validators are asked to lock an amount of cryptocurrency as collateral; this prevents these actors from attacking the network. This is because, to attack, they require a big staked amount to gain control over other nodes. Jupiter incentivizes the validators for playing honestly and also slashes their staked crypto for acting suspiciously.
Proof of History is a novel concept of the Solana blockchain. Under this mechanism, a series of cryptographic hashes are generated and each transaction, before being inserted into this sequence, is timestamped; this timestamp is derived from its position on the hash chain. Thus by marking them, the network’s security is ensured and it prevents bad actors from attacking the Jupiter Solana platform.
Jupiter Solana’s DeFi Offerings
The platform provides some of the most popular DeFi functionalities:
- Swap Trading
- Dollar Cost Averaging (DCA)
- Value Averaging
- Limit Order
- Perpetual Trading
- Jupiter Solana Bridge
What is Jupiter Solana Swap?
It is the most common type of trading that Jupiter Solana DEX provides. Like other platforms, here Over here, you can immediately swap a token with another token. Select a token you want to sell and then select a token you want to buy. Jupiter will automatically display the best rate available for swap after searching multiple DEXs on Solana.
After comparing prices across these exchanges, users see a price that is the lowest and also has an associated lowest fee. Once they confirm the swap, they get the best routing and settlement, both of which are automatically done by Jupiter.
This is how the swap works on Jupiter: We know that AMMs like Raydium and Orca launch new tokens regularly. These AMMs have liquidity pools where users can deposit their token pairs. Jupiter’s indexer scans these market makers to automatically detect new tokens.
Once detected, the new token is available for trading immediately, no matter how high or low that token’s liquidity is. It then waits for 14 days after which Jupiter performs its first liquidity check. If liquidity lies within the set parameters, it remains tradable on Jupiter, otherwise, it is removed. Post that, a periodic liquidity check is performed every half an hour.
When a user places a swap order, the platform’s routing engine called ‘Metis’ comes into action. Metis on Jupiter Solana decides which route to take to complete the swap for the best price and minimum slippage. It may split the trade into 2 or more routing tracks. But instead of planning such routes all at once, Metis creates routes one by one based on the available liquidity. Depending on the data, this routing engine may create multiple splits by creating complicated routes. Also, while creating paths, Metis can use the same DEX multiple times.
Example of a Split Route
Consider that a trader wants to swap 100 USDC with a $JUP token. Then the possible splits can be:
First Split: 50 USDC
USDC to SOL and then SOL to JUP (both swaps on the same DEX 1)
Second Split: 30 USDC
USDC to USDT and then USDT to JUP (swaps on 2 different DEXs, DEX 1 and DEX 2)
Third Split: 20 USDC
USDC to SOL and then SOL to JUP (via DEX 1 again but using a different liquidity pool than that used in split 1).
The above example also shows that METIS can reuse the same DEX multiple times for different splits if doing so is more profitable. Once the split is complete, all three trades are merged and the user gets the swapped token in his wallet.
Dollar Cost Averaging (DCA) on Jupiter
DCA on Jupiter is an investment strategy that lets users invest a fixed amount of tokens at regular intervals to buy other tokens. This happens irrespective of the token’s price and allows regular purchase of a crypto asset over a long period.
DCA is a useful strategy in the bear markets as you get to invest in a token that is trading at a low price; by continually investing at low prices, you get a lower average purchase price and are able to buy more tokens.
Jupiter on Solana provides DCA as a way to counter market volatility, which is a common phenomenon in crypto markets. As an example, you can buy a $JUP token every day, every week, or at any other provided frequency irrespective of of its current trading price. For more details on how to buy an asset using DCA on Jupiter, refer to this article.
Value Averaging on Jupiter
Value Averaging on Jupiter works similarly to DCA as it also involves a user contributing over a period of time. But the difference is that the amount of investment can be different each time.
VA reacts to the market sentiments unlike DCA; when market sentiments are running negative and the prices are in bearish mode, you can invest more and in a bullish market, you invest less. These adjustments help in lowering the overall cost basis and bring in more profitability to the investor. V
A is particularly useful to adopt when the crypto market is in a state of high volatility; at such times, value averaging would adjust the amount you invest. Varying the investments can also be helpful if you are in the market for the long run. Apart from this, it can let you sell your low-liquidity tokens without letting you sell them all at once.
For example, if you want to sell a token worth $500 every month.
In the first month, if the token price is $10, you can sell 50 tokens.
In the second month, if the token price is $20, you sell 25 tokens.
In the third month, the price falls to $5 and you can sell 100 tokens.
What is a Limit Order on Jupiter Solana?
This feature allows a trader to set the price at which he wants to buy or sell a token. This price may be above or below the current market price. When the price of the token specified by the trader matches or when the best-matched price is available, the trade is executed and the trader receives tokens in his wallet. For this too, Jupiter on Solana searches process on multiple DEXs before offering the best order.
For a Buy Limit order to be executed successfully, the tokens provided must either match the limit price you specified or go below that price. The opposite is true for a Sell Limit order; the price of your token must either match the price you specified or go above that price.
How Does Jupiter Solana DEX Work for Perpetuals?
Perpetual or Perps as they are commonly called, are futures contracts that have no expiry date; this means you can hold your position endlessly. They also let you trade with borrowed funds by taking leveraged long or short positions. At present, Jupiter Perps allows leverages up to 100x for only three tokens: SOL, ETH, and wBTC (wrapped BTC).
Jupiter Perps DEX is made functional by a JLP Pool that has these three tokens along with 2 stable coins: USDT and USDC. By making sure that there is enough liquidity, the DEX allows users to open and close their positions using high leverage. Like traditional futures contracts, a trader needs to deposit collateral to maintain his position.
If for a long position, the trade goes in the opposite direction and the maintenance margin starts to decrease, the trader is required to deposit more collateral to keep his position intact and avoid liquidation. The opposite is true for a short position,
Jupiter on Solana follows a Request Fulfilment and Off-Chain Keepers model for its Perps Exchange. Under Request Fulfilment, a trader initiates a trade; this trade is not executed immediately. Instead, it is recorded as a request and it is then batched with multiple other trading requests from other traders.
Batching requests like this speeds up the execution and also reduces on-chain transaction costs. There are specialized nodes called Off-chain Keepers that keep a watch on these batches of incoming requests. They monitor the markets continually and make sure that the orders are executed only when market conditions are favorable and have liquidity.
When the conditions are right, the keepers examine these aggregated batches of transactions and submit them on-chain. The state of the perpetual contact is changed accordingly. The keepers are rewarded for doing so.
Jupiter Solana Bridge for Assets
Bridge in Jupiter works as a medium to transfer crypto assets across different blockchains. By ensuring interoperability among different networks, the assets can be transferred from one blockchain to the other without any hassles.
It gives ample opportunities to the users to trade assets that belong to one platform on the other platform. Jupiter Solana bridge also ensures that liquidity is transferred between chains; smaller blockchains are provided with liquidity by connecting them to bigger chains.
Circle has developed a Cross-Chain Transfer Protocol (CCTP) which is a bridge that facilitates seamless transfer of its USDC (USD Coin) across different blockchains. Jupiter has integrated this bridge; this allows traders to transfer USDC from different blockchain networks directly into the Solana ecosystem; this means that you do not need to leave the Jupiter platform for USDC transfer. This ensures that the transfer is simple, derives no fees and has zero slippage.
CCTP ensures that the liquidity fragmentation caused by different wrapped versions of USDC is reduced. Jupiter Solana Bridge ensures that interoperability is maintained perfectly within its ecosystem.
What is JLP Token?
JLP stands for Jupiter Liquidity Provider Pool which lets liquidity providers (users) borrow crypto tokens from it and use this fund to open positions on Jupiter Perps. A user’s share in the JLP Pool is determined by his share of JLP tokens. $JLP is an SPL (Solana Program Library ) token that is standard for all fungible and non-fungible tokens trading on the Solana blockchain. There are three ways in which JLP tokens derive their value:
- A JLP token on Jupiter Solana represents a share of the pool that holds 5 assets: SOL, wBTC, ETH, USDC, and UDST, which means if the value of these assets increases, $JLP token’s value also increases and vice-versa.
- JLP pool acts as a counterparty to users’ trades on Jupiter Perps, which means if traders lose money on their trades, their losses stay in the pool, thus increasing the $JLP value. If they gain profits, these are derived from the pool itself and $JLP’s value decreases. This means JLP holders gain more profits when traders lose money.
- The JLP token holders earn 75% of all trading fees collected from trader’s activities on Perps; this includes trade opening/closing fees, feed collected from large traders that impact price movement, borrowing fees that traders pay to maintain their leveraged positions, and finally the trading fees which is the fees levied on every trade made in the pool.
Jupiter connects traders to JLPs and makes sure that they have enough liquidity to carry out their perpetual trades. The JLPs, in return, reserve a big portion of the trading fees.
What is JUPSOL Token?
JUPSOL is an LST (Liquid Staking Token) that users get when they stake their SOL tokens with Jupiter Solana’s validators. This means, you, as a trader, receive JUPSOL when you stake SOL and can use this JUPSOL in other DeFi activities (borrowing, lending, providing liquidity) on the platform. You get JUPSOL initially in the 1:1 ratio with SOL.
Over time, this LST token value increases in comparison to SOL as it accumulates staking rewards and MEV (Maximal Extractable Value) profits. Staking rewards are earned by users when they stake SOL with validators.
MEV is the extra profit that a validator receives by reordering and bundling transactions, Jupiter on Solana passes 100% of the MEV profits to JUPSOL holders. To maximize the yield further, Jupiter’s team retrieved 100,000 SOL from its treasury and delegated it to their own validator node; this validator node earns staking rewards. Instead of keeping these rewards to itself, Jupiter invests 100% of the rewards back into the JUPSOL pool, which increases APY for JUPSOL holders.
Jupiter Solana Airdrop Events
Jupuary Airdrop is an annual airdrop event by Jupiter Solana that rewards its community and promotes its active participation. Recently, this airdrop started on January 22, 2025, and approximately 700 M tokens were airdropped to the users. Out of these, 425 M $JUP tokens were distributed to users who actively took part in token swaps. 75 M were allocated to those who staked their tokens. Users have a 3-month window to claim their tokens.
What’s Happening Right Now…
As per their tweet on Feb 17, 2025, Jupier Exchange has started collecting USDC; this accumulation would be used to purchase $JUP tokens from the market. Such a buyback is for reducing the circulating supply of the token and ultimately leads to an increase in the price of the $JUP token.
Before this buyback actually begins, Jupiter has started several community engagement activities on social media platforms like X and Discord. The tweet also mentions “Meow’s 2030 vote”, which is a governance proposal introduced by one of its founding members, MEOW for bringing focus to a long-term growth plan that includes performance-based bonuses, allocating 280M JUP tokens to hire and retain top talent for Jupiter.
In one of the other tweets, it emphasized its commitment to bring transparency towards the launch of meme coins and bring more openness in the process.
Link to Jupiter on Solana Documentation
For a detailed description of how each of the DeFi products works on Jupiter, refer this link. It contains detailed tutorials on how to launch each product and a user guide for each one of them.
Disclaimer
This article is for informational purposes only and is NOT a financial advice. We do not promote, in any form, any cryptocurrencies or tokens mentioned herein. The content of this article is based on the information available up to the knowledge. You should be aware that investing in any cryptocurrency is subject to market risk and you MUST do your own due diligence (DYOR) before you put any money in any of the coins.