Jupiter airdrop crashed Solana network upon launch

Solana Jupiter
Key facts:
  • The Jupiter airdrop was valued at USD 700 million.
  • By mistake, a 430% bump and dump of another JUP token was made, but on Ethereum.

The decentralized exchange Jupiter launched its JUP token yesterday, Wednesday, January 31. The free distribution of the token, an event called airdrop, caused congestion in Solana and a curious bump and dump by mistake.

The Jupiter airdrop was valued at USD 700 million, thanks to the distribution of 1.35 billion JUP at an initial value of USD 0.40 per unit. During the day, the price of JUP reached USD 0.70. At the time of writing, the token is trading at $0.59.

The high volume of airdrop claims from Jupiter users led to the Solana network having short-lived issues processing transactions. The commissions also felt the burden and doubled; They went from 1,002 SOL in total on January 30 to 1,919 SOL on the 31st, the day of the airdrop .

Other indices that also grew in Solana were the number of active wallets, which rose by 479,000 and reached 1.3 million; and accounts linked to tokens, at 566,000 and totaling 2.2 million. Both increases occurred within 24 hours, specifically on January 31, the launch date of JUP.

Solana network commissions.
Commissions on Solana skyrocketed due to the high transaction volume of the Jupiter airdrop. Source: Solscan.

Among decentralized finance (DeFi) protocols on Solana, Jupiter is the 13th with the most total value locked (TVL) at $92 million. However, a report from January 30 positioned it as the most used DeFi service on the network, with 80% of the organic volume. In addition, it became the decentralized exchange (DEX) with the highest trading volume in general , with USD 1.3 billion in the last 24 hours.

The curious side effects of the Jupiter airdrop

Aside from the high congestion in Solana, the Jupiter airdrop had a side effect that few would have imagined. It happened that many traders unintentionally did a bump and dump on an Ethereum token that, coincidentally, has the same ticker, JUP.

JUP is the token of Jupiter, a project on Ethereum that is no longer active, according to its own website. In the last week, the price of the token averaged USD 0.005, but rose to USD 0.026 yesterday, after many users began to acquire the token thinking that it was the one distributed by the eponymous project in Solana.

Bump and dump Jupiter.
The trading volume of JUP, on Ethereum, multiplied by nine thanks to its similarity to the Solana token. Source: CoinMarketCap.

The effect lasted for a few hours before the token returned to its previous value. Many people will probably have lost money due to the mistake, buying at a very high price, occasionally inflated, and selling at a much lower price.

A lucky man who became a millionaire

Beyond the repercussions of Jupiter’s airdrop for Solana and the confusion with its “namesake” in Ethereum, a new millionaire was created yesterday in the world of cryptocurrencies. Someone under the name “7poJrJ” received JUP 1.85 million in the airdrop, which is equivalent to USD 1.1 million at the time of writing, the on-chain analysis account Lookonchain revealed.

After receiving the tokens, the owner of the fortune took immediate action and sold 1.4 million JUP at USD 0.63 on decentralized exchanges. Additionally, he transferred 121,000 JUP to the Bybit and MEXC exchanges. At his address in Solana, he still keeps JUP 319,000.

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