What is Jupiter? The Advanced Dex Aggregator That Brought Innovation and a Memecoin Storm to Solana

Jupiter is a decentralized exchange (DEX) aggregator on Solana that searches all the Solana DEXs for the best price to swap cryptocurrencies. JUP is the name of the crypto that powers Jupiter, and was launched in an airdrop in 2024.

The Jupiter protocol is one of Solana’s top-performing DeFi dApps, with approximately $2.4 billion in TVL (Total Value Locked) from users and investors.

Read on to find out:

• How Jupiter transformed Solana forever.
• Other services Jupiter offers, including:
• Perps, aka Perpetual Trading, (a risky but potentially rewarding type of leveraged trading),
• A useful Portfolio Tracker,
• Triggers and Recurring orders,
• An upcoming Jupiter Lending program,

And more!

How Jupiter Solved Solana’s DEX and Liquidity Problem (And Brought a New Era of Memecoin Trading On Chain)

Good liquidity is essential for crypto trading. It keeps prices stable and fees low, lets people enter and exit positions easily, and makes it easy to create and trade new cryptos.

And as we’ll see, Jupiter and its role in liquidity played a huge role in the popularity of memecoins such as Dogwifhat (WIF), Goatseus Maximus (GOAT), Popcat (POPCAT), Book of Meme (BOME), and Cat in a Dog’s World (MEW).

However, you can’t actually provide liquidity directly to Jupiter.

Other DEXs like Raydium let users provide liquidity to trading pairs like USDT/WIF or SOL/JUP and earn fees. Jupiter takes a different approach. It seeks out liquidity on other DEXs - serving as a liquidity aggregator.

This means that it connects all the different liquidity pools on Solana, and allows people to easily trade using one or more pools, to maximize liquidity.

Why is that important?

Jupiter and its liquidity aggregator were revolutionary for Solana. Before Jupiter, swapping low-liquidity coins was a nightmare.

The proof?

Solana’s memecoin season of 2024.

Without the aggregated liquidity that Jupiter brought to Solana, these new coins would have been impossible to trade in large amounts, and many of them would have faded before they got noticed by the mainstream.

But first, let's take a step back. How did this all start?

Before Jupiter, Swapping Low Liquidity Coins on Solana… Sucked

Just like how Jupiter got mainstream attention through a massive airdrop of its native token JUP in January 2024 and beyond (who doesn’t like free stuff?), many other valuable tokens on Solana were also airdropped to users of the chain.

But there was a problem.

Web3 users looked at their wallet and sometimes saw a memecoin worth hundreds of dollars, such as $COPE or $ROPE. Sounds good, right?

But when they tried to sell, they couldn’t.

Here’s why: At the time, Solana was using a CEX-like orderbook system called Serum (you can read more about Serum and how order books work here). In short, this meant you had to list your crypto at a set price and hope someone would buy it.

This was easier said than done, since buyers could be hard to find, and prices would keep changing.

Picture this: You list your $700 worth of $COPE at the going rate of the moment, eg $0.021. You sit back and wait, but another seller lists it for a lower price than you - $0.019, and then the price changes. Then, more sellers and buyers arrive. So you either sell too cheaply, or don’t sell at all.

This led to an awful user experience. And a far cry from the quick swaps that traders were used to on other DEXs, such as BNB’s PancakeSwap, or Uniswap on Ethereum.

Some sellers waited for days to find a buyer. (Which in crypto time is like weeks or even months!) Others had to watch YouTube videos just to figure out how to use the thing. Frustrating!

And the Serum UI looked like this:

Just.. Ugh.

Even for those familiar with CEX pro trading apps like Binance and Coinbase Pro, this didn’t feel very ‘web3’ or user-friendly. Quite the opposite, in fact.

So in response, DEXs like Raydium and Serum V2 were launched. These mixed the orderbook system with AMMs (Automated Market Makers).

AMMs are essentially pools of liquidity, with a little robot managing it. (Ok, there isn’t an actual robot, but there is automation going on, and robots are cute, so stick with me.)

This allowed people to easily swap cryptocurrencies, with user interfaces (UI) that were nice and simple, like PancakeSwap.

But then came the Liquidity problem.

Each DEX has its own little pool with its own little ‘robot’. But these robots can’t communicate with each other. So liquidity stayed fragmented. Which, in practice, caused the same headaches as low liquidity.

And as we’ve seen, low liquidity means trouble. It can lead to wildly different prices for the same token across DEXs. Worse, it can make it hard (or impossible) to cash out big gains, because no single pool has enough tokens.

If you wanted to find the best price, you had to check every DEX manually. Annoying. And if you were trading a big position, you might have to split it across multiple DEXs. If you were lucky enough to be able to exit at all.

Enter Jupiter…

As we’ve mentioned, although you can’t provide liquidity to Jupiter itself, Jupiter aggregates liquidity from all the DEXs on Solana. And then it uses its smart routing tech, ‘Metis’, to get you the best deal.

Not only does it show you the best price, but if necessary, it will split your trade across multiple DEXs. You get low slippage, fast speeds, and a nice UI, all at the click of a button. No more puzzling over complicated order books or checking multiple sites.

Perfect for when you need a quick and easy trade (and really, when would you ever need a slow and frustrating one?!)

So what’s all this about memecoins and revolutions?

We’ve talked about how Jupiter made things much easier for traders. And so, as you’d expect, that brought more users on chain.

But of course, it also made things much better for new token creators. Between Jupiter and Raydium, launching a token on Solana became much easier and cheaper. Why does that matter? If you create a liquidity pool for your new memecoin, you want everyone to be able to find it without hassle.

And that’s where Jup.ag shines.

Token creators realised the power of the two DEXs. And then no-code memecoin deployer protocols like pump.fun were created. Creating the memecoin boom.

This meant that lots of new liquidity (eg, buyers, sellers, and their coins) came to Solana, making transacting easy and, at least potentially(!) profitable.

And so POPCAT, BOME, WIF, and more were created, and many more. Making Solana one of the best chains for memecoins. And by extension, for trading other coins as well.

TLDR: Jupiter’s aggregation system made swapping crypto much easier and attracted lots of new tokens and users on chain.

Solana is now one of the biggest blockchains in web3, with a 10% market share of the total TVL.

Who Got Airdropped JUP Crypto Tokens and Why?

The JUP tokens were airdropped to millions of users in late January 2024, in an event that they called Jupuary.

But Jupiter itself was launched in 2021, by a pseudonymous creator called Meow. Many DeFi degens and tech enthusiasts also got involved.

Eligibility for the airdrop was awarded to those who had swapped on Jupiter or contributed meaningfully to the project - in other words, those who had been a ‘good cat’.

‘Good cat’ examples included:

• “Onboarding new users
• Holding Cadet/Cat of Culture roles
• Writing JUP-related content
• Helping on Discord/X/Reddit/JUP forums
• Attending all JUP calls and rally calls
• Anything users can think of that has helped the growth of the Jupiverse.”

And for those who missed the first airdrop? The team promised that more airdrops would follow, for new ‘good cats.’

Although Jupiter was already established well before the airdrop, the combo of the publicity of ‘free magic internet money’ - $JUP - and the functionality, really did send Jupiter, and thus Solana, into orbit.

At the time of the first airdrop, the total amount was worth $612 million, with 50% of the tokens going to users and 50% going to the team.

Jup’s Pie Cats - (are you getting the theme by now?)

As promised, more airdrops followed, which increased usage and participation in Jupiter, and with it, Solana’s overall on-chain activity.

And that’s how a storm was born.

What Other Cool Features Does Jupiter DEX offer?

Perpetual Trading on Jupiter

If you’re an advanced trader, then you probably already know about Perps or Perpetuals. This is a form of leveraged trading that allows you to make big money with small money, by using your crypto as collateral.

But it also allows you to lose all your money, if you don’t know what you are doing. Especially in crypto, where price movements can be huge.

There are also other things that can go wrong with decentralized Perpetual Trading, including outdated oracles during periods of congestion. Jupiter lets you know about them before you can start.

Jupiter’s Portfolio Manager

Have you ever noticed how it's a bit of a pain to see all the assets you have in a wallet? Especially if your cryptocurrencies are locked up in DeFi protocols such as Aave or GMX, and split across multiple chains.

Sure, you can use a blockchain explorer, such as Solscan, but it’s not that user-friendly, and you need to check each chain separately.

On EVM (Ethereum Virtual Machine) compatible chains such as Optimism, Polygon, BSC, and more, you can use third-party portfolio managers such as Debank or Zerion. And now wallets like Rabby and even MetaMask have built-in ways to view all of your assets in one place.

But Solana is built differently, and coded in its own programming language called Rust. This is arguably what makes it faster than Ethereum, and coders say that Rust is easier to use.

(And that’s also why Solana couldn’t just fork EVM-compatible DEXs like PancakeSwap or Uniswap.)

Anyway, to make up for that, Jupiter made their own portfolio tracker. It’s advanced, yet super easy to use.

It can be extremely useful to see not only what cryptos you have, and also, see your previous transactions. Following that trail with a blockchain explorer gets confusing fast. IYKYK.

Limit Orders, Dollar Cost Averaging, and More on Jupiter

If you’re using a CEX, then you can usually set a limit order to buy, say JUP, when it hits your desired price. And for those who like to take the emotion out of trading, you can simply DCA (Dollar Cost Average) into your fave crypto every month or similar.

These features have been hard to find on web3, and when we last tried it on Uniswap (admittedly, a while ago) our orders didn’t trigger, as the market was moving too fast.

Jupiter’s stability and increased access to liquidity make it ideal for building these kinds of features. And now they have them, with more flexibility than we’ve ever seen on any CEX or DEX.

The tracker keeps getting better. Now, you can set a limit order, aka a ‘Trigger Order’, with all kinds of prerequisites. Similarly, you can get fancy with your DCA options using ‘Recurring Orders’.

Other Cool Features of Jupiter’s DEX

If we’ve tried to make one thing clear here about Jupiter, it's how the team has continued to develop and push the frontiers of what is possible on DEXs and web3.

Jupiter doesn’t rest on its laurels. Recent and upcoming additions to their tool set include:

• Launchpads - monitoring the activity of all the launchpads on Solana,
• AlphaScan - a great way to find new tokens
• Top Traded - the tokens with the highest trading volume,

And more.

And if you click the ‘more’ tab, at the top of the interface, you’ll see other features not listed here.

Such as the ability to onramp with Jupiter (no need for a CEX!) and the code to embed a version of Jupiter on your website!

Do Like the Rich - With Jupiter Lend

One last thing. A new project is coming to Jupiter, called Jupiter Lend. This will allow you to collateralize your crypto assets. You can earn money by depositing them, or unlock collateral to buy other cryptos.

Top tip: For those of you living in regions where crypto is taxable, you might want to take note. You generally owe taxes when you sell a crypto (or any asset), but not when you borrow against it.

This, incidentally, is one way that billionaires like Elon Musk pay less tax. Did Musk sell $44B worth of Tesla shares to buy X? Absolutely not! He simply got credit backed by his stock holdings.

This kind of strategy was previously only accessible to those with a LOT of money. But now, thanks to blockchain and decentralized lending platforms, it's something we can all take advantage of!

Jupiter FTW!