Jupiter’s $70 Million Buyback Saga and the New JupUSD Stablecoin

The Solana‑based DEX aggregator Jupiter has found itself at the centre of a heated debate over token economics, capital allocation, and the viability of conventional buyback strategies in a highly volatile crypto market. Two weeks after a high‑profile public challenge from co‑founder Siong Ong, the project announced the launch of JupUSD, a reserve‑backed stablecoin that promises a new source of on‑chain liquidity and institutional credibility. Below is a sober assessment of the situation, grounded exclusively in the facts presented.

1. The $70 Million Buyback Experiment

What was promised During 2025 Jupiter committed roughly $70 million to repurchase its native token, JUP. The move was billed as a mechanism to reduce supply, elevate scarcity, and ultimately support the token’s price. In a post‑mortem, Siong Ong stated that “more than $70 million was spent on JUP buybacks throughout 2025, yet the initiative delivered minimal results in terms of price performance.” The narrative was clear: investors expected a measurable uptick in market price.

What actually happened

  • Price impact was negligible. Even after the 2025 repurchase programme, JUP’s price remained far below the 52‑week high of $1.26292 and continued to decline, dropping 89 % from its peak by early January 2026.
  • Structural selling pressure remained unmitigated. The token faces an impending $1.2 billion unlock, a fact that dwarfs the $70 million spent on buybacks.
  • Investor sentiment turned sceptical. The co‑founder’s public criticism amplified doubts about Jupiter’s tokenomics and the efficacy of traditional market‑support mechanisms.

Why buybacks failed

  • High emission and unlock schedule. With continuous token releases, each repurchase is diluted by fresh supply.
  • Limited use of reserves. The $70 million was likely drawn from operational cash or reserves that could have been deployed more strategically.
  • Market psychology. Investors prioritize long‑term growth prospects and governance incentives over short‑term price fixes, especially when a project’s fundamental value proposition is unclear.

2. The Launch of JupUSD

Core details

  • Pegged to the U.S. dollar. JupUSD is a reserve‑backed stablecoin.
  • Backing infrastructure. 90 % of reserves are held in USDtb, a licensed, GENIUS‑compliant stablecoin backed by BlackRock’s BUIDL Fund. The remaining 10 % is a USDC liquidity buffer paired with a secondary pool on Meteora.
  • Institutional custody. Ethena Labs, known for issuing $16 billion in stablecoins, provides custody and infrastructure support.
  • Platform integration. JupUSD is embedded across Jupiter’s product suite, offering a unified settlement layer for its DEX aggregator.

Immediate market reaction Following the announcement, JUP’s price surged—an event that underscores the market’s appetite for new on‑chain financial infrastructure. However, the surge was short‑lived in the broader context of the token’s declining trajectory, suggesting that the move is more about signalling than fundamentally altering the token’s supply‑demand dynamics.

Strategic implications

  • Liquidity creation. The stablecoin can attract users who require dollar‑denominated liquidity without leaving the Solana ecosystem, potentially increasing trading volume.
  • Revenue diversification. Jupiter may earn fees from stablecoin issuance, redemption, and associated liquidity provision.
  • Regulatory alignment. By leveraging BlackRock‑backed reserves, Jupiter positions itself favorably in a regulatory environment that increasingly scrutinises stablecoin transparency.

3. Critical Assessment

The buyback narrative has collapsed. The failure to influence price demonstrates that a sizeable capital outlay is insufficient when structural tokenomics are misaligned. Jupiter’s decision to spend $70 million on buybacks without addressing the underlying supply issues reflects a shortsighted strategy that prioritises headline‑friendly metrics over sustainable token economics.

JupUSD is a double‑edged sword. On one hand, the new stablecoin offers a tangible product that can enhance user experience and generate revenue. On the other hand, it may distract from the core problem: a token that is eroding in value due to continuous unlocks and inadequate demand creation. If JupUSD fails to attract sufficient liquidity, its existence could be rendered moot, leaving the underlying token vulnerable.

Investor trust remains fragile. The public questioning from a co‑founder, coupled with the subsequent price collapse, signals deepening skepticism. Jupiter must now deliver on its stablecoin promise and, more importantly, re‑engineer its tokenomics to align supply with genuine utility.

4. Outlook

  • Short term: Expect volatility as JupUSD gains traction and as the market digests the implications of the $1.2 billion unlock.
  • Medium term: If liquidity pools around JupUSD grow, Jupiter could see a modest rebound in trading volumes, but the token’s price may continue to lag until a comprehensive governance overhaul is introduced.
  • Long term: The viability of Jupiter hinges on its ability to couple JupUSD’s infrastructure benefits with a transparent, demand‑driven token model that mitigates dilution and unlock pressure.

In the end, Jupiter’s recent moves illustrate a classic crypto paradox: large‑scale financial initiatives—whether buybacks or stablecoin launches—do not automatically translate into market confidence or sustainable value creation. The platform’s next steps will determine whether it can transition from a series of headline strategies to a resilient, economically sound ecosystem.