Understanding Jupiter’s tokenomics ahead of its fi

The upcoming airdrop of Jupiter’s native token (JUP) is drawing attention in the DeFi sector, particularly within the Solana ecosystem.

DeFi projects have often been challenged by issues like liquidity fragmentation and uneven token distribution. At times, this has led to trading inefficiencies and centralization concerns.

Jupiter, a Solana-based liquidity aggregator, tackles these problems by pooling liquidity from multiple decentralized exchanges in an effort to improve trade rates and reduce slippage for users. This approach is somewhat akin to that of 1inch, a well-known liquidity aggregator, which similarly consolidates liquidity to optimize trades.

Recently, the network announced an airdrop of its native JUP token, which the protocol will distribute to existing users of the platform, rewarding them for their participation and support.