Revamping Tokenomics: Lowering Staking Inflation to 8% & Increasing Buyback/Burn to 70%

Proposals
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Summary This proposal aims to address the ongoing dilution of the JUP token. The current staking inflation rate (around 20%) is drastically undermining the effectiveness of our current buyback mechanisms. We propose two major changes: reducing the staking inflation rate from 20% down to a sustainable 8%, and increasing the protocol fee allocation for buyback and direct burn to 70%.

The Problem: Dilution is Outpacing Buybacks While the Jupiter ecosystem continues to thrive as a leading DeFi platform, the token’s value proposition is suffering due to excessive inflation. A 20% staking inflation rate is simply barbaric for a token with our market positioning. Unfortunately, this high inflation means our current buyback efforts have effectively failed to preserve or increase value.

As long-term holders, we do not want to constantly receive “more JUP” just to watch its fundamental value dilute day by day. The sheer volume of new tokens entering circulation heavily outweighs the buyback pressure. We prefer less inflation and a stronger price performance per token. We want the JUP we already hold to be worth more, rather than holding a larger quantity of a progressively devalued asset.

Proposed Solutions

  1. Lower Staking Inflation to 8%: Drastically reduce the staking reward percentage from its current ~20% to a fixed, sustainable 8%. This will immediately stem the bleeding caused by token dilution while still providing a reasonable incentive for governance participation.

  2. 70% Buyback Allocation: Increase the share of protocol fees sent to the buyback mechanism (Litterbox) to 70%.

  3. Direct Burn Mechanism: Instead of just accumulating tokens or recirculating them into the DAO treasury, these bought-back tokens should be directly and permanently burned. This will enforce true deflationary mechanics.

Conclusion For Jupiter to cement itself as the ultimate DeFi superapp, its tokenomics must reward long-term conviction, not punish it with dilution. Adopting a high-revenue, direct buyback-and-burn model while slashing inflation to 8% will signal to the market that the DAO prioritizes real value accrual for $JUP holders.

I invite the community to discuss this proposal and share their thoughts below. Let’s make JUP scarce and valuable.