Fund Future and On-Going ASR Rounds through $JLP and Platform Fee Allocation and Proportional Benefits for $JLP Holders

Jupiter DAO $JUP
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Introduction
This proposal seeks to establish a sustainable funding model for Jupiter’s highly successful Active Staking Reward (ASR) rounds by redirecting a portion of the fees from Jupiter Liquidity Provision Token ($JLP) and other platform proceeds toward purchasing $JUP tokens on the open market. To address potential impacts on JLP holders, the proposal includes a tiered fee reduction mechanism that provides proportional platform fee discounts based on JLP holdings. This structure ensures that the platform can support future ASR rounds while continuing to offer unique benefits to JLP holders.

Rationale
The current benefit of holding JLP tokens lies in the fee-based price rollovers that contribute to $JLP’s value. This proposal uses a portion of these fees to fund ASR rounds, which could reduce the direct benefit to $JLP holders. By implementing a fee reduction system for JLP holders, we aim to offset this potential reduction and enhance their benefits. This structure aligns platform growth with community incentives and contributes to token stability through regular market purchases of $JUP.

Proposal
1. Fee Allocation for $JUP Purchases
Designate a percentage of $JLP proceeds and platform fees for $JUP token purchases. Purchases will be scheduled regularly (e.g., weekly/monthly) and executed, using the very tools at Jupiter has created (dollar-cost averaging (DCA) strategy or value averaging (VA) strategy to reduce market impact).

2. ASR Funding Pool
Acquired $JUP tokens will go to the dedicated ASR funding pool to support ongoing and future ASR rounds. Quarterly transparency reports will detail all purchases, token balances, and ASR distributions.

3. Fee Reduction for $JLP Holders
Introduce a tiered fee reduction model for $JLP holders, with the discount percentage scaling according to the amount of $JLP held. This provides a direct benefit to $JLP holders, preserving their incentives and encouraging long-term participation.

Implementation Steps
This proposal has several details which need to be addressed before being put forward;

  1. Conduct a community vote on the exact percentage of fees for $JUP purchases.
  2. Determine the value/volume of purchases to be made (dynamic or static) and the methodologies for obtaining the $JUP tokens from open market.
  3. Develop and finalize the fee reduction structure for $JLP holders.
  4. Establish a transparent reporting system to monitor and communicate ASR fund allocations.

Conclusion
Encouraging more $JUP holders to participate in ASR directly benefits the Jupiter community and supports token value. By gaining more $JUP holders who actively participate in ASR, it enhances the ecosystem by reinforcing a steady demand for the token, which aligns with this proposed ASR funding model. As platform fees are used to purchase $JUP tokens on the open market, and increase in ASR participation reduces the circulating supply, the impact of these purchases is amplified in relation to token price stability and potential appreciation. This incentivizes both current and prospective holders, supporting the proposal’s goal of a sustainable, community-driven ecosystem.

Gaining more JLP holders aligns with this proposal by increasing the platform’s overall liquidity, which can enhance trading stability and attract more users. As fees generated from JLP activity are partially redirected to buy $JUP tokens, an expanded JLP base results in a larger fee pool, allowing for more substantial $JUP purchases to fund ASR. Additionally, the fee reduction incentive for JLP holders makes the platform more attractive to investors, promoting long-term growth while ensuring that these holders continue to benefit from their involvement.

This proposal supports the sustainability of ASR rounds while maintaining benefits for $JLP holders through proportional fee reductions. By reinvesting in $JUP, the platform reinforces token stability, incentivizes community engagement, and ensures that future ASR rounds are adequately funded. Community input on the specifics of the proposal will help align platform development with user interests, fostering a thriving ecosystem for Jupiter and $JUP stakeholders.

TLDR
This proposal suggests using a portion of Jupiter’s platform fees to buy $JUP tokens open market for ASR funding while offering fee reductions to $JLP holders, scaled by their holdings. This approach sustains ASR rounds, supports $JUP token stability, and maintains benefits for $JLP investors, enhancing overall community engagement and platform growth.

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I don’t think being parasitic to JLP is the answer at all. JLP is its own thing and it needs fees compounding in to protect and secure Jupiter Perps. JUP tokens is an entirely different thing and should be kept separate to JLP. Passing JLP interest over to JUP seems pointless as JUP holders aren’t supporting JLP, it isn’t generating anything new, if you want to hold JLP then do so. This isn’t really an idea its just redirecting rewards from JLP providers to non JLP providers. Why not propose that ASR goes to JLP holders? Then you’d just hold more JLP, problem solved. Now more TVL will come to JLP and Perps will be better off, and then the JLP can be used for other fintech initiatives once its big enough to support Perps and other lending forms.

I think the body of content here and sentiment is good, please just come up with better solutions. If you want REV share for JUP, there’s gotta be better ideas out there and new revenue sources. Jupiter is a juggernaut, and I do agree showing some leadership and innovation on the JUP earning front besides “JUP gets more JUP” would make Jupiter super bullish in the space!

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This here sums up my thoughts and feelings about this proposal better than I would have put. 100% agree with your thinking here and how well you phrased it👌🏿

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I understand your sentiment, but I fear you missed some crucial parts of the proposal. I suggested that PART of the funding could come from $JLP and outlined how to make it so it is not being parasitized.

3. Fee Reduction for $JLP Holders
Introduce a tiered fee reduction model for $JLP holders, with the discount percentage scaling according to the amount of $JLP held. This provides a direct benefit to $JLP holders, preserving their incentives and encouraging long-term participation.

Pretty much sums it up concisely. Any “reward loss” could or would be offset by the reduction in fees, which would encourage users to HOLD $JLP which is the point of the token. The fee reduction could apply to products outside of perps as well.

To say JLP and JUP are completely different things and should be separate is, in my opinion, extremely backwards thinking. Everything Jupiter does, involved all of Jupiters products. $JUP already intermingles with $JLP because the $JUP token will determine $JLP governance within the DAO. The idea that the fees generated from perps and other platform fees not going to the same place is flawed. It all goes to the DAO coffers, one location.

I understand your reaction but implore you to really think about what was outlined. If you have a better solution then please by all means share!

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I replied to Fairysquid’s thoughts, let me know what you think!

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Why do people keep trying to mix the DAO with the Jupiter platform? They are, right now, two different entities. It’s like a cheeky attempt to get platform fees that belong to the platform, in the hands of the dao.

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I have my doubts about this proposal. On the one hand, I am a holder of $JUP and I also trade $JLP, and I have honestly never seen anything as well-balanced as this one. I like how everything is going, and I am one of those who think that, if something is working, it is better to leave it as it is. Although the idea is interesting, I don’t know if it will really make a positive difference or if it is better not to change things.

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JLP is the liquidity token for the Jupiter Perpetuals platform, while JUP is the governance token for the JUP DAO. These are two distinct tokens, and I don’t understand why we need to create this “parasitic relationship,” as @fairysquid puts it. Are we now expected to devise a model to ensure JLP holders also benefit from the ASR?

I understand that LPs don’t need to actively stake tokens or harvest yields, as APR earnings are automatically embedded within each JLP token and reflected in its increasing price. However, if we’re redirecting part of the platform’s fees to the DAO to fund ASR rewards, isn’t it ethically questionable for JLP holders not to benefit from that as well?

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Yeah after discussing it in discord with other CoC and Cadets this proposal is bunk. Hopefully the team finds a way to fund future rounds of ASR though!

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Thanks for the reply. Glad you’ve engaged with an open mind in the debate following your proposal. It’s only in doing so that we all find some common grounds to move the debate forward and better this amazing ecosystem we have fallen in love with.

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While I do not believe that leeching from JLP is the way to go, I do think this is a good conversation starter towards aligning the Exchange and its users with the DAO.

Hear me out. I have been one of the vocal DAO members leaning extremely against Jupuary renewal. At the same time, I am not blind to all the PPP arguments made to justify why JUP investors should cut a massive check to the Exchange users, however, it is missing a key ingredient; how does the Exchange volume generated by the said Users benefit the DAO/Investors in the long run? If we can leave JLP be, then perhaps we could focus on the alignment issue to make PPP possible & Jupuary viable.

Say there were to be a modified proposal as sampled using OPs post as shown below, would you guys be FOR it? :point_down: :arrow_down_small: :arrow_down:

Modified Proposal (w/ JLP removed from the argument).

1. Fee Allocation for $JUP Purchases
Designate a percentage of platform fees for $JUP token purchases. Purchases will be scheduled regularly (e.g., weekly/monthly) and executed, using the very tools at Jupiter has created (dollar-cost averaging (DCA) strategy or value averaging (VA) strategy to reduce market impact).

2. ASR Funding Pool
Acquired $JUP tokens will go to the dedicated ASR funding pool to support ongoing and future ASR rounds. Quarterly transparency reports will detail all purchases, token balances, and ASR distributions.

Implementation Steps
This proposal has several details which need to be addressed before being put forward;

  1. Conduct a community vote on the exact percentage of fees for $JUP purchases.
  2. Determine the value/volume of purchases to be made (dynamic or static) and the methodologies for obtaining the $JUP tokens from open market.
  3. Establish a transparent reporting system to monitor and communicate ASR fund allocations.
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Buyback jup tokens with platform fees and fund ASR with that? :person_facepalming: You can’t use platform fees, that belong to Jupiter team, not jup dao, and fund ASR, for the dao, with that.
Jupiter exchange keeps delivering quality products, building super cool stuff, we have no idea of cost or resources necessary to be the number one dexchange… thank god we don’t have any authority as a dao over jupiter platform fees or instead of building stuff we’d revenue share everything :sob:
The jup token supply is split into 2, half the team and half for the community. There are 2 multisig wallets, community hot and community cold, that contain half of the jup token supply, and are set aside for the community. Why not make plans with that?

2 Likes