Jupiter's Vision for Solana's Ultimate DeFi Super App

In a recent episode of the Lightspeed podcast, host Jack Cubinek sat down with Kash Dhanda, a prominent figure in the Solana ecosystem who recently joined Jupiter, to discuss the project's ambitious vision and strategy. The conversation shed light on Jupiter's plans to become the ultimate DeFi super app on Solana, touching on topics ranging from acquisitions and revenue streams to token strategy and market positioning.

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Jupiter's Transition and Growth

Kash Dhanda, formerly of Superteam, recently joined Jupiter in a move that has brought both excitement and intensity to his professional life. Working on a project of Jupiter's scale - with nearly a million on-chain token holders - has presented new challenges and opportunities. Dhanda noted the intensity of the work, mentioning sleepless nights and even the return of teenage-like pimples, but emphasized the rewarding nature of making an impact at such a scale.

The Jupiter End Game: Building a DeFi Super App

Jupiter's ultimate goal is to become the DeFi super app for Solana and potentially the broader crypto ecosystem. Dhanda explained:

"Where we're getting to is indeed the DeFi Super app, right? Everything that you can do on Solana, we want you to do it through Jupiter."

This vision involves creating a comprehensive platform that offers convenience and discovery for users, addressing key challenges in the crypto space such as onboarding, trading, and advanced financial operations.

Jupiter's Acquisition Strategy

To achieve its super app vision, Jupiter has embarked on a series of strategic acquisitions. These include Moonshot, Solana FM, Sonar Watch, and others. Dhanda outlined two primary drivers behind this acquisition strategy:

1. Acquiring exceptional founder talent
2. Filling expertise gaps quickly

"Rather than trying to learn something when we have a gap in expertise, let's just go find the best people at it and make them a part of the team," Dhanda explained.

This approach has allowed Jupiter to rapidly expand its capabilities and talent pool, with the team now consisting of about 90 people, including 15-20 former founders or CEOs.

Jupiter's Team Composition and Growth

Despite its multi-billion dollar valuation, Jupiter maintains a relatively small team of around 90 people. This lean approach contrasts with many other large projects in the crypto space. Dhanda emphasized the intensity of the work environment, stating, "No one sleeps at Jupiter. That's the honest truth of it."

The team's growth has been strategic and focused, with a significant portion of the team consisting of former founders and CEOs. This concentration of "founder energy" is seen as a key strength in Jupiter's ability to innovate and execute rapidly.

The Super App Vision: East vs West

When discussing the super app concept, Dhanda acknowledged that it's more prevalent in Asian markets but argued that the trend is also present in Western markets, albeit in different forms. He cited examples like Uber's expansion into various logistics services and Amazon's diverse offerings.

"The brand hasn't come across out of Asia. Of course, you know, WeChat, Grab, et cetera, are known as super apps. But I think the returns to convenience, the returns to simplicity, and the returns to brand loyalty are so high that any time you have a mature industry and a market leader in that industry, they seek to kind of grow and create more value for their users by offering more services in a simple interface," Dhanda explained.

Jupiter's Global Strategy

Despite its team being primarily based in Asia, Jupiter aims for a global presence. Dhanda emphasized that the project's position in the Solana ecosystem naturally leads to global coverage. He noted:

"Given our kind of position in the ecosystem, right, where on any given day, something like half of every Solana block is from Jupiter, right? We end up having coverage basically everywhere."

Jupiter maintains 12 regional communities worldwide, from Nigeria to India to Poland, indicating its commitment to a truly global strategy.

The Chinese Exchange and Global Trading Dynamics

Dhanda highlighted an interesting dynamic in the global trading landscape, particularly regarding Chinese exchanges. He noted that 60-70% of all trading volume comes from China or Chinese-adjacent territories, with centralized exchanges in these regions accounting for over 85% of volumes.

This concentration of trading activity in Asia presents both challenges and opportunities for DeFi platforms like Jupiter. Dhanda argued that DeFi's borderless nature could lead to a more level playing field:

"DeFi ends up being more global because DeFi has no boundaries. You don't have to worry about the same kind of regulatory concerns and so forth that you have there."

Jupiter's Revenue Breakdown

One surprising revelation from the discussion was the breakdown of Jupiter's revenue streams. According to Blockworks research, a significant majority of Jupiter's revenue in recent months has come from perpetual futures (perps) trading, rather than its well-known aggregator service.

Dhanda confirmed this, explaining that the perps business has been particularly successful:

"JLP is I mean depends on how the market's doing. But it's usually you know, it's almost always the top three asset JLP being the liquidity provider token for perps because our perps is based on an AMM kind of model rather than order book model."

However, he emphasized that this revenue distribution doesn't reflect the allocation of resources within the company. The spot trading and aggregator services, while currently generating less revenue, involve more complexity and a larger team.

Jupiter's Competitive Edge in Aggregation

As competition in the Solana ecosystem increases, with new players like Titan and Camino entering the aggregator space, Dhanda outlined Jupiter's key competitive advantages:

1. Product superiority: Continuous improvement and rapid shipping of new features.
2. Community and brand trust: A large, established user base and daily habit formation.
3. Extensive integrations: Jupiter is the most integrated platform in all of DeFi.

Dhanda also highlighted the technical superiority of Jupiter's latest offerings, such as the Juno liquidity engine and the upcoming Ultra-v2 update.

The Evolution of Jupiter's Aggregator Technology

Jupiter's aggregator technology has evolved significantly from its initial version, Metas v1, to the current Juno engine. Dhanda explained the key differences:

"Metas v1 which again is very good and was built to be reliable, right? Like that was the key thing because we were scaling and powering basically all of Solana DeFi the most important thing was that transactions went through right?"

The newer Juno engine incorporates both on-chain AMM liquidity and an RFQ (Request for Quote) system called Jupiter Z. This system aggregates liquidity from market makers worldwide, offering potentially better prices and gasless transactions for users.

The Future of AMMs and Market Makers

When discussing the future of decentralized trading, Dhanda pushed back against the notion that AMMs (Automated Market Makers) are doomed. He argued that AMMs will continue to play a crucial role, especially for long-tail assets:

"I don't think AMMs are going away. I think that like the AMM model was really important in particular for long tail assets like in order to onboard a market maker, you know, there's days to wait."

However, he acknowledged the growing importance of market makers and opaque trading teams in the Solana ecosystem. Jupiter's strategy is to integrate with all liquidity sources to offer the best prices and execution for users.

The Relationship Between Solana Apps and the Solana Network

An interesting point of discussion was the potential for Solana apps to become "parasitic" to the Solana network, similar to how Layer 2 solutions have affected Ethereum. Dhanda argued against this possibility, emphasizing the composability benefits of staying on Solana:

"One of the benefits of Solana DeFi and one of the reasons that you know Jupiter is on Solana and only Solana is because of the kind of composability benefits that you get like all the users are there all the liquidity is there and the UX is so seamless."

He likened the relationship to Microsoft's platform strategy, where applications built on top of the platform should ideally make more money than the platform itself.

Jupiter's Token Strategy: The JUPE Token

The discussion touched on Jupiter's token strategy, particularly the JUPE token. Dhanda described it as the "GOAT token" (Governance, Ownership, Alignment, Transparency):

1. Governance: Jupiter has conducted 22 proposals in the last 12 months, with high participation rates.
2. Ownership: The token provides a stake in the project's success.
3. Alignment: Through mechanisms like the JUPE accumulation plan, token holders benefit from the project's success.
4. Transparency: Regular audits and public disclosures enhance trust.

Dhanda emphasized the importance of maintaining a balance between token utility and community engagement:

"Tokens are useful things for aligning incentives for kind of community currency purposes. They help people form more of an attachment identity and have an ownership stake and things."

The Future of Transparency in Crypto

Dhanda predicted that transparency would become increasingly important in the crypto space:

"I do believe it has a bit of an aside in the following six or twelve months. We are going to see a transparency premium added to tokens as the investor base becomes more sophisticated."

He highlighted Jupiter's leadership in this area, with regular transparency audits and public disclosures of treasury information.

Conclusion: Jupiter's Ambitious Vision for Solana DeFi

Jupiter's strategy, as outlined by Kash Dhanda, paints a picture of an ambitious project aiming to become the central hub for all DeFi activities on Solana. Through strategic acquisitions, technological innovation, and a focus on user experience, Jupiter is positioning itself as the go-to platform for everything from simple swaps to complex trading strategies.

The project's emphasis on governance, transparency, and community engagement through its JUPE token strategy sets it apart in an ecosystem often criticized for opaque operations and misaligned incentives. As the Solana ecosystem continues to grow and evolve, Jupiter's super app vision could play a crucial role in shaping the future of decentralized finance on the platform.

Facts + Figures

• Jupiter has nearly 1 million on-chain token holders
• The Jupiter team consists of about 90 people, including 15-20 former founders or CEOs
• Jupiter accounts for approximately half of all transactions on Solana blocks on any given day
• 60-70% of all crypto trading volume comes from China or Chinese-adjacent territories
• Centralized exchanges in Chinese regions account for over 85% of trading volumes
• Jupiter has conducted 22 governance proposals in the last 12 months
• Jupiter has 450,000 staking wallets
• Governance proposals regularly see 200,000 to 250,000 wallet votes
• Jupiter burned 3 billion tokens out of the supply at a recent event
• The Litter Box Trust, a third-party entity, receives 50% of all Jupiter protocol revenues
• The Litter Box Trust has accumulated about 32 million JUPE tokens, worth approximately $15-16 million
• Jupiter's perps trading is the second biggest in crypto behind Hyperliquid
• Jupiter supports 50 AMMs and 20 market makers through its RFQ offering
• Jupiter Z (the RFQ system) accounts for about 10-12% of all Jupiter volume

Questions Answered

What is Jupiter's end game in the Solana ecosystem?

Jupiter aims to become the ultimate DeFi super app for Solana. The goal is to create a platform where users can perform all their DeFi activities, from onboarding and simple swaps to advanced trading and portfolio management. This vision involves integrating various services and products into a single, user-friendly interface to enhance convenience and discovery for users in the crypto space.

How is Jupiter pursuing its super app vision?

Jupiter is pursuing its super app vision through a combination of strategic acquisitions and internal development. The company has acquired several prominent projects in the Solana ecosystem, including Moonshot, Solana FM, and Sonar Watch. These acquisitions serve two main purposes: acquiring exceptional founder talent and quickly filling expertise gaps. Additionally, Jupiter is continuously developing and improving its own products, such as the Juno liquidity engine and the upcoming Ultra-v2 update.

What are the main revenue streams for Jupiter?

Surprisingly, a significant portion of Jupiter's revenue comes from perpetual futures (perps) trading rather than its well-known aggregator service. The perps business, based on an AMM model, has been particularly successful. However, the company continues to invest heavily in its spot trading and aggregator services, which involve more complexity and a larger team. Jupiter also generates revenue through its Ultra mode, which charges small fees for advanced trading features.

How does Jupiter's token (JUPE) fit into its strategy?

The JUPE token is described as the "GOAT token" (Governance, Ownership, Alignment, Transparency). It serves multiple purposes within the Jupiter ecosystem:

1. Governance: Token holders can participate in decision-making through regular proposals.
2. Ownership: It provides a stake in the project's success.
3. Alignment: Mechanisms like the JUPE accumulation plan ensure token holders benefit from the project's success.
4. Transparency: Regular audits and public disclosures enhance trust in the project. The token strategy aims to balance utility with community engagement and align incentives between the project and its users.

How does Jupiter maintain its competitive edge in the aggregator space?

Jupiter maintains its competitive edge through three main factors:

1. Product superiority: Continuous improvement and rapid shipping of new features.
2. Community and brand trust: A large, established user base and daily habit formation.
3. Extensive integrations: Jupiter is the most integrated platform in all of DeFi. Additionally, Jupiter's technical innovations, such as the Juno liquidity engine and the RFQ system (Jupiter Z), allow it to offer better prices and execution than competitors.

What is Jupiter's stance on the future of AMMs versus market makers?

Jupiter believes that both AMMs and market makers have important roles to play in the future of decentralized trading. While market makers are becoming increasingly important, especially for large trades and liquid assets, AMMs will continue to be crucial for long-tail assets and providing consistent liquidity. Jupiter's strategy is to integrate with all liquidity sources, including AMMs, market makers, and other aggregators, to offer the best prices and execution for users.

How does Jupiter view its relationship with the Solana network?

Jupiter sees its relationship with Solana as symbiotic rather than parasitic. The project benefits from Solana's high-speed, low-cost infrastructure and the composability of the ecosystem. In turn, Jupiter contributes to Solana's growth by driving a significant portion of on-chain activity and attracting users to the platform. Dhanda likened this relationship to Microsoft's platform strategy, where applications built on top of the platform ideally make more money than the platform itself, creating a positive ecosystem effect.

What is Jupiter's approach to transparency in the crypto space?

Jupiter places a strong emphasis on transparency, which it sees as increasingly important in the crypto industry. The project conducts regular transparency audits, makes public disclosures of treasury information, and maintains open communication with its community. Dhanda predicted that in the coming months, there will be a "transparency premium" added to tokens as the investor base becomes more sophisticated and demands greater accountability from projects.