$JUP Slumps to All-Time Low as Budget Votes Plague DAO Governance

Jupiter, Solana’s DeFi superapp, is growing through some tough growing pains. Once celebrated as one of Jupiter’s greatest assets, the Jupiter DAO’s frustration, inflation, and infighting have sent $JUP value plummeting to new all-time lows.

Adding to the token’s woes, $JUP staking outflows suggest that more DAO members could be abandoning Jupiter governance, bringing millions of tokens back into circulation.

What’s causing unrest in the Jupiverse, and what countermeasures have protocol leaders suggested?

Inflation, Budget Votes Blamed for $JUP Decline

Despite Jupiter purchasing over 20M $JUP tokens since the launch of its buyback mechanism, $JUP is enduring a brutal downtrend. After trading as high as $1.36 during Jupiter’s Catstanbul event in late January, $JUP has since dropped over 70% in 5 weeks to currently trade hands at $0.40.

While poor conditions across crypto markets share some of the blame, Jupiter’s devout community argues that rampant token inflation and redundant governance proposals concerning working group budgets are to blame for $JUP’s underwhelming performance.

According to Jupiter stakers, the very Active Staking Rewards (ASR) that encouraged them to join Jupiter DAO governance are part of the problem. Between Jupiter ASR and January’s Jupuary airdrop event, ~850M tokens have entered $JUP’s circulating supply, devaluing and diluting the currency in the eyes of holders.

With a surplus of $JUP tokens hitting markets, social media commentators have suggested that the Jupiter team re-evaluate their priorities.

Just weeks earlier, Jupiter came under fire from its community for what detractors considered overinflated team salaries. 

Jupiter DAO’s current governance proposals, aimed at forming additional working groups focusing on design and developer relations, have only added more fuel to the fire. 

While both proposals are expected to pass, $JUP holders have expressed frustration towards working group budgeting votes.

Over 75M $JUP to be Unstaked in Next 30 Days

Compounding Jupiter’s market woes, $JUP unstaking is still hovering around all-time highs, with over 75M tokens expected to be released to circulation over the next 30 days. Which With coincides with the 50M additional tokens to be distributed to stakers in the next round of ASR.

However, despite the fear and uncertainty, $JUP staking inflows have remained relatively stable. According to Flipside data recorded over the past week, an average of 2.92M $JUP tokens are staked every day. Meanwhile, a daily average of 1.1M $JUP are withdrawn from Jupiter Governance. 

These positive net flows suggest markets aren’t quite ready to abandon $JUP governance and are still willing to align themselves with the protocol long-term.

Jupiter Team Plans Path Forward

Led by Meow, Siong, and Kash Dhanda, the Jupiter team is remarkably receptive to community feedback. After listening to the grievances and concerns of crypto’s largest DAO, Jupiter has acknowledged that it needs to change its approach moving forward.

While next steps haven’t been officially confirmed, Meow has committed to discontinue governance votes concerning budgets and redefining the role and scope of Jupiter DAO’s jurisdiction.

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