Original title: Jupiter Crypto Conglomerate
Original article by: Marco Manoppo, Investor at Primitive Ventures
Original translation: Ashley, BlockBeats
Editors note: Jupiter announced several major initiatives at the Catstanbul Conference, including acquisitions, AI funding, token buybacks and destruction, and the launch of the full-chain interoperability network Jupnet, demonstrating its ambition for vertical integration. This article analyzes its business strategy and explores how brand, community, and user experience determine value capture in a permissionless encryption environment, revealing the inevitable trend of applications moving toward integration.
The following is the original content (for easier reading and understanding, the original content has been reorganized):
Last month, Jupiter made a series of big announcements at its flagship Catstanbul conference. To sum it up — it was a lot. There was the Burning Cat, there were acquisition announcements, and most importantly: Jupiter openly admitted that its ambitions extend beyond its current ecosystem. In today’s post, we’ll unpack Jupiter’s latest business strategy and explore why, given enough time, every crypto app that holds onto users will eventually choose to vertically integrate to maximize value capture. Let’s dive in.
TL;DR
Acquisitions
Jupiter acquired a majority stake in Moonshot, a popular mobile trading app that generated $35 million in fees following the Trump Meme Coin craze, and also completed the full acquisition of Solana DeFi asset management tool Sonar Watch.
Financial support
Jupiter is working with Shaw of ElizaOS to allocate $10 million to support AI developers starting through the Jupiter Launchpad.
Token Buyback
50% of Jupiter transaction protocol fees will be used to buy back JUP tokens.
Token Burning
3 billion JUP tokens (~$3.6 billion) have been destroyed to reduce supply and lower the fully diluted valuation (FDV) of the protocol.
Jupnet
Jupiter plans to launch Jupnet, a full-chain interoperable network that aims to integrate the entire crypto ecosystem into a single decentralized ledger, maximizing the user and developer experience.
Honestly, this is one of the strongest product roadmap and new initiative announcements I’ve seen in recent quarters. The execution by the Jupiter team is top notch, from the extremely detailed communications (Meow tweets at length almost every day) to the high level of transparency they provide to the community.
Here is a typical example:
Jupiter recently released a transparency audit report detailing the team’s key fund flows. “We have been publicly tracking token flows since genesis, and have gone through two audits to account for all token flows (except 1 JUP) and consolidate tokens into verified wallets.”
Read that last sentence again. For any crypto protocol that has completed a TGE, it is critical to do your best to track the ownership of each token. Similarly, public companies clearly record the ownership structure of their stocks. In the crypto space, since blockchain is permissionless, it is relatively difficult to track ownership, but there are still tools that can help teams achieve high-precision tracking.
Meanwhile, Uniswap…
Given enough time, every app will be vertically integrated
The core point of todays article is that business strategies in the crypto world are fundamentally different from business models in traditional permissioned environments.
Outside of the crypto industry, companies typically build moats through regulatory barriers, long-term B2B contracts, proprietary innovations, and more.
However, in the crypto industry, most of these “moats” no longer exist because the permissionless nature of blockchain allows everyone to build on top of existing products and users can choose alternatives at almost any time.
Therefore, what really matters is brand, user experience, and community, because as the industry matures, we will see more and more experienced entrepreneurs entering the crypto track, building on existing infrastructure and launching blood-sucking attacks on existing giants in the industry.
Ironically, this is exactly what Deepseek is currently doing with OpenAI.
Ultimately, in the crypto space, the “moat” will evolve into the following three points:
Brand → Users trust you
True Community → Users want to be part of your organization and have real ownership (via revenue sharing)
User Experience → Users love your product
The Aggregation Strategy in a Permissionless Environment is a Smart Move
Before Jupiters success, many people were skeptical about the aggregation model, especially in the EVM ecosystem, where the market performance of this model was not impressive. For example, 1inch failed to surpass Uniswaps market value because most users still prefer to use Uniswap directly (too lazy to switch) or choose other MEV-friendly DEXs such as CoW Swap.
However, in the Solana ecosystem, Jupiter managed to convince users that it provides the best trading experience, successfully aggregated traffic, and achieved value capture.
To be honest, I’m not sure when this transition happened. I remember using Orca and Raydium during the DeFi Summer of 2020-2021, and also tried an early version of Jupiter. If my memory serves me correctly, by the end of DeFi Summer, the user experience of Orca and Raydium had become terrible for several reasons:
Lack of unified token standards (e.g. multiple bridged USDC versions)
UI is lagging
This poor user experience can still be seen even a year later.
Jupiter used to show the best trade path to prove that it had the best exchange rate. In hindsight, this was a very smart move because there was no clear DEX market winner in the Solana ecosystem at the time. Even if Raydium had the highest market share, its market dominance was far less than Uniswap on Ethereum.
Excellent business strategy and operations
Simply put, Jupiter executes better on its core business - providing Solana users with the best token swap experience. Many protocols have tried similar strategies in the EVM ecosystem, but few have succeeded. In addition, the Jupiter team was originally formed by Racoon Dev led by Meow, which means that during the bear market, they can maintain operations in low-cost emerging markets with a small number of engineers, minimizing capital consumption.
Not all successful startups need a sexy startup angle, and many successful crypto entrepreneurs started out as development studios. This traditional service business can teach extremely efficient cost management experience and teach founders how to explore market opportunities in a targeted manner.
By 2024, this savvy business operation ability is fully demonstrated by the Jupiter team.
In just 12 months, Jupiter has acquired 5 teams:
Moonshot: Acquired this platform focusing on mobile meme transactions
SonarWatch: Acquisition of on-chain asset management tool
Ultimate Wallet: Acquisition of a self-custodial wallet
Coinhall: Acquisition of decentralized trading terminal
SolanaFM: Acquisition of blockchain browser
Forgive my bluntness, but this is a genius move. Some of the acquired projects face intense competition and market challenges, making them excellent acquisition targets. Also, I don’t have any inside information, but I wouldn’t be surprised if these acquisitions were mainly done through JUP tokens. Considering the current FDV of JUP, the Jupiter team has undoubtedly completed the expansion of the territory and attracted a group of excellent developers at a low cost.
in conclusion
This idea is not new. Dan Elitzer of Nascent wrote an article in 2022 titled “The Inevitability of UNIchain”. The core idea is: “When applications reach a certain scale, control over block space becomes increasingly important… The solution is to build a dedicated chain or Rollup, with validators who care about the success of the application managing the block space.”
My point is similar but more straightforward - this is the manifestation of human nature in a capitalist business society: optimizing value capture and vertical integration.
The crypto industry is still run by humans, and we still can’t escape our instinctive desire to control the value chain. Let’s be realistic.
