Jupiter’s massive insider allocation of Solana airdrop JUP

Jupiter airdropped its new token JUP to roughly a million Solana wallets — one of many largest airdrops in Solana’s historical past. As of its $0.70 opening commerce on Binance, tokens allotted to the airdrop had been price roughly $700 million.

Solana pockets house owners claimed one-fifth of the airdrop inside its opening hour; as of press time, they’ve claimed two-thirds. Particularly, over 459,000 pockets house owners have claimed round 700 million JUP price $417 million with the token now buying and selling at $0.62.

After all, the Jupiter workforce allotted half of JUP’s whole provide to themselves.

Jupiter’s founder, who goes by Meow, additionally leads different recently-launched tokens WEN and MER (Meow airdropped WEN to wallets that had used his Jupiter change). Though pseudonymous, Meow is doxxed and usually reveals his face on digicam.

Are Jupiter insiders siphoning JUP’s liquidity?

Some crypto skeptics surmised that the airdrop occasion served a main objective of distracting from insider liquidations. Jupiter founders withdrawing a number of the liquidity backing their JUP allocations may have accounted for a part of JUP’s $1.4 billion in first day transaction quantity.

For public relations and media functions, founders are sometimes cautious about promoting their proprietary token immediately. It all the time seems to be dangerous when somebody claims {that a} founder is promoting their very own coin into retail funding. As an alternative, savvy insiders usually choose to withdraw the token’s backing or “liquidity.” This preserves their proper to assert, albeit on a technicality, that they’ve by no means “offered” the token — regardless of the monetary similarity of promoting or withdrawing the token’s liquidity.

Within the case of this airdrop, JUP is primarily backed by the stablecoin USDC on the exchanges that Jupiter helps, together with Aevo, Meteora, Orca, and its personal Jupiter change.

Richard Coronary heart of HEX employed an identical technique — hardly ever promoting HEX immediately whereas intentionally dancing round questions on his gross sales of the ETH that gathered in HEX’s liquidity swimming pools. “I bought quite a lot of actually cool stuff. I’m promoting one thing for it, ain’t I?” he stated.

Jupiter founder Meow has additionally admitted to promoting a number of the JUP token immediately.

Meow boasts that his workforce would solely promote 250 million JUP throughout launch week.

Learn extra: Almost $580K drained with Cointelegraph, Pockets Join pretend airdrop

Different points with the Jupiter airdrop

At present, JUP is buying and selling 11% below its January 31 $0.70 open. Amid the confusion of Jupiter’s airdrop, an unrelated token with the same ticker on Ethereum quintupled and then retracted all of those gains. JUP on Solana has no relation to JUP on Ethereum.

Due to the proliferation of altcoins now numbering in the millions, many unrelated blockchain assets share the same ticker symbol. Traders have confused Unit Protocol (USDP) with Paxos Dollar (USDP), Pepe on Ethereum (PEPE) with Pepe on Ordinals (PEPE), Bitconnect (BCC) with Bitcoin Cash (BCC), Ahoolee (AHT) with Athena Health Token (AHT), and many other examples.

For nearly two years, Jupiter has operated as a token swap exchange on Solana. Its JUP airdrop might not improve that existing operation as much as provide exit liquidity for its leaders.

Meow’s JUP airdrop launched with surprisingly few glitches given Solana’s tendency to freeze during spikes in activity (Solana’s blockchain has experienced dozens of complete outages. Its validators had to make at least two attempts to restart within the past year). Despite some validators struggling during the first hour of the airdrop, there were no major technical outages.

Learn extra: Can Solana keep afloat with out SBF and FTX?

Briefly, Jupiter performed a multi-hundred million token airdrop for Solana customers whereas retaining half of the overall provide for the Jupiter workforce. Technically, the occasion was clean for Solana’s uptime-challenged blockchain.

The ensuing buying and selling quantity may have masked the founding workforce’s token sale, however buying and selling bot customers may have cared extra in regards to the value leaping after they offered their tokens off.

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