Jupiter co-founders consider stopping JUP buybacks, and the community suggests using staking and protocol assets to reward long-term holders

On January 4th, Jupiter co-founder SIONG posted on X discussing “whether to stop JUP buybacks,” and stated that last year over $70 million was spent on JUP buybacks, but the price did not change much. This $70 million could be used to provide growth incentives for existing and new users. Regarding the discussion on “whether to stop JUP buybacks,” Solana co-founder Anatoly Yakovenko said it is best to store profits as “protocol assets that can be claimed as tokens in the future.” Users can lock and stake for a year to earn token rewards, and as the balance sheet grows, stakers can receive greater returns. Multicoin co-founder Kyle Samani agreed with the core idea of Anatoly Yakovenko, but the mechanism needs further optimization. Traditional stocks do not effectively reward long-term holders. Crypto teams should find ways to allocate an excess value proportion to long-term holders. Jordi Alexander, founder of Selini Capital, stated, “Adjusting the buyback amount based on price is a good approach. If the price is low, buy back as much as possible, as this can significantly reduce supply. When the market is overheated, the pace should slow down. Some founders are more accustomed to traditional stock buyback decisions made by CEOs/management, and they can do buybacks temporarily. However, if transparency, predictability, or legal issues are primary considerations, a more decentralized protocol can achieve this programmatically. A simple method is to use the calculated P/E ratio, allowing each protocol to design its own P/E for buybacks based on its specific situation.” Fabiano.sol, a KOL in the Solana ecosystem, said, “The reason buybacks of JUP are not working is because currently people have no reason to hold JUP. I think the correct process should be: first give people a reason to hold the token, and after that is satisfied, do buybacks. Buybacks and burns are still one of the best deflationary mechanisms, but they take time. Currently, Jupiter distributes 50 million JUP (~$10 million) quarterly as staking rewards, and Jupiter uses 50% of its income to buy back JUP and deposit into Litterbox, with quarterly buybacks of $10 million–$20 million. A potential alternative is to use that $10 million for staking rewards instead of buybacks. At current prices, this could generate approximately 25% APY, which is very attractive. Although this is not a direct deflationary mechanism, I believe it is more beneficial for the token price than simple buybacks.”