JUP Airdrop Tests Solana Resilience As Network Activity Surges
Solana activity surged significantly in the wake of JUP airdrop. But the token is already down 70% after reaching as high as $2 following launch.
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Jupuary finally arrived today, with Jupiter airdropping 1 billion tokens to its early users. But the early hype that saw the token reach as high as $2 quickly dissipated. It is now down 70% and trading at $0.5886.
The airdrop was one of the most anticipated events in the Solana community this year, and it has lived up to the billing. Over 900k wallets for 1 billion JUP tokens and the following trading frenzy was enough to cause congestion on the Solana network.
However, the network withstood the volume of transactions as there were no reports of downtime, even during peak traffic hours. This is good news for Solana and highlights how its technology has improved over the past few years.
Nevertheless, the airdrop was not completely hitch-free. The surge in transaction activity on Solana in the hours leading to the airdrop caused some RPC nodes to struggle briefly.
Why JUP Matters
JUP airdrop is one of the biggest events since the Solana renaissance began. This is mostly because of Jupiter's position with the Solana DeFi ecosystem. Jupiter is a liquidity aggregator that has become the biggest decentralized exchange on Solana.
With the trading volume that competes with Uniswap v3 and even surpasses it on some occasions, Jupiter represents the DeFi potentials of the network.
Although Jupiter has been around for years, it only announced an airdrop late last year. The JUP token has a total supply of 10 billion tokens, with 50% set aside for the Jupiter team. Present team members only get 20%, and the allocation will only begin vesting after two years.
The other 20% is set aside for strategic reserve, which goes to future team members, investors, and stakeholders. The remaining 10% will be used for liquidity.
Meanwhile, the project is also airdropping 4 billion tokens, which is 40% of the supply to users. This would be in four separate airdrops of 1 billion each, and the airdrop will happen on January 31 of each year until it is complete. The 1 billion tokens left will go to community contributors as grants. The Jupiter DAO will determine the allocation of grants.
The comprehensive tokenomics with a 50/50 split between the team and community has attracted mostly commendation as many believe the airdrop to be fair.
What Next For JUP
So far, 60.54% of JUP has been claimed by over 416k wallets, and the token is already trading on all the popular exchanges, including Binance. In the past 24 hours, it has seen $1.21 billion trading volume from just 1.35 billion circulating supply.
For many observers, whether this token will rally is the most important question. Given its affiliation with the most used project on Solana, it will likely see further rallies.
However, the volatility of crypto tokens means it is still a major risk for investors. Jupiter co-founder Meow has also said that the token will not be utility-focused and that more emphasis will be on why it is valuable.
