Bull or bear? Analysis of Jupiter's future prospects

Author: Jack Inabinet, Bankless; Compiler: Deng Tong, Golden Finance

Jupiter’s airdrop last week put 1 billion JUP into the hands of the earliest users of the Solana DEX aggregator, but airdrop recipients should Do you hold these tokens?

In today’s issue, two Bankless analysts take opposing views, building bull and bear case cases for the token’s future performance.

What is the bull case for JUP?

Speculation has become one of the main use cases for cryptocurrencies.

When future bull activity triggers an unprecedented wave of cryptocurrency speculation, the exchanges that facilitate the process provide attractive investment opportunities for those seeking massive returns.

While aggregation on Ethereum has yet to become a killer product, it has a unique chance of success on Solana due to the Solana chain’s low fees, which make trading across large liquidity pools economically economically viable is feasible.

Solana’s leading exchange, Jupiter, which leverages aggregation to provide the best possible prices for trades – an attractive feature for both crypto newbies and DeFi pros – is currently working on Solana 80% off the deal!

For those "degens" (extreme risk investors) who are unhappy with spot cryptocurrency exposure, Jupiter offers an excellent perpetual contract product with hundreds of millions of dollars in daily trading volume, allowing Liquidity providers earn over 100% on their deposits and offer traders 100x leverage on BTC, ETH, and SOL.

With its spot exchange facilitating the majority of Solana trades and its perpetual contract offering only being capped by limits set to manage risk, the bullish case for Jupiter is clear. ——Jack

What is the reason for JUP’s bear market?

While Jupiter does all this, sometimes that's not a good thing. Let's take a look at some of the factors that could combine to make a bear case for Solana Center.

Although Jupiter does provide a full range of services, sometimes, this is not a good thing. Let’s take a look at some factors that could combine to create a short case for Solana Center.

Airdrop Tokens Underperform: Although airdrops are initially attractive, they tend to decline in the long term. This probably extends to most airdrops; when people get free money, they want to cash out.

"Jack of all trades, master of none": Jupiter's various product suites, from DCA tools to perpetual contracts, run the risk of lacking focus. For example, if users prefer a dedicated platform or a new DEX emerges on Solana, Jupiter could find itself overextended and scrambling to double down.

ETH > SOL: Jupiter's fate is closely tied to Solana's performance. While there may be some consensus that Solana will outperform Ethereum this cycle, it’s worth remembering that just a few months ago the sentiment was quite the opposite. Additionally, Ethereum’s activity still dwarfs Solana’s in the broader DeFi context.

Vampire Attacks: Given the mercenary nature of capital in the crypto space, vampire attacks, with better incentives to lure users away, are an ever-present threat. This could seriously deplete Jupiter’s liquidity and user base.

Overall, while Jupiter seems to have a solid foundation at the moment, nothing is certain in the crypto space, especially in the crypto space. ——David