DLMM Case Study: The $JUP Launch

Hi, I’m Soju.

I joined the Jupiter / Meteora team in December 2023, where my first participation was in coordinating and leading the JUP Launch.

This is the story (case study) of how Jupiter leveraged the new (at the time) DLMM technology to launch $JUP, the GOATed token.

Summary of the JUP Launch:

• Initial Price: 0.4032 USDC, Max Price: 0.6987 USDC
• Supply: 2.5% of JUP, or 250M JUP tokens
• Fee: 5% base fee (and dynamic) + 80bps step

Bin visualisation: Intuitive Launchpool Model

The JUP Launch took place via a 2.5% JUP pool in LFG, and a 10% of JUP airdrop (with 1.5% for other things like MM loans).

Why use the DLMM?

$JUP launched with a 10% airdrop, and we expected a lot of volume from airdrop recipients, or newcomers who wanted to support our new token.

The intended outcome for our launch to facilitate a huge amount of liquidity and volume, and also bootstrap retail liquidity for our platform. We also wanted to build a reserve of USDC to absorb potential airdrop selling pressure.

We chose the DLMM and brainstormed ways to leverage it as a launch mechanism, adding new features to help make our lives easier.

One example feature we implemented was Slot Activation — ensuring that the airdrop and trading will begin at exactly the same time, precisely.

This innovation and mechanism became the LFG and the DLMM Launch Pool.

Slot Activation

We utilized Slot Activation for both the airdrop and for the DLMM pool, ensuring that both the airdrop and pool went live exactly at the same time.

With Slot Activation in place, bots were able to buy in the small window between the pools activated and retail users claiming and selling their airdrop. This allowed the volume and trading to start organically and fairly for all users.

Setting an Initial Price (0.4032 USDC / $4B FDV)

Back then, there was no Alpha Vault, and a lack of battle-tested sniper mechanisms. We decided to set a high initial price, so that snipers had a much more fair price to enter at.

They also served to provide the first USDC into the pool for airdrop sellers to sell into. They took a risk that JUP will outperform $4B, and earned 20–50% on launch day for that risk.

In contrast, many other tokens were sniped and snipers sold earning 10x-50x on day 1. You can see how the R/R for sniping JUP was a lot more reasonable than other tokens, and this was due to the initial price.

Bootstrapping Retail Liquidity

We wanted to make sure that retail LPs earned money providing liquidity on JUP, so we set a high 5% fee on the Launch Pool.

This meant that if you were providing liquidity on another pool, you do not need to compete with the main launch pool unless prices were moving 5–10%. When prices are moving that much, the launch pool would come in and reduce impermanent loss for retail LPs.

Providing liquidity for JUP at launch was attractive and had a good risk/reward, and many folks in the LP Army started off doing so.

Today, JUP is still a highly liquid token, without a single cent spent on liquidity incentives.

What Happened at Launch

At the precise slot of the launch, the DLMM pool was activated and the airdrop was open for claiming.

Snipers, DCA and Limit Orders bought JUP from the pool, building up a reserve of USDC in the pool. Airdrop sellers could immediately sell into the pool for USDC.

Massive trading volume took place, facilitating the transfer of JUP from airdrop recipients to long-term holders, and the pool racked up over 10M USDC in trading fees (thanks to the 5% fee) which was then used to capitalize Jupiter DAO.

Retail liquidity grew, going up to $200M TVL by day 2–3, and the launch pool liquidity slowly diminished over 3–4 months.

Today, JUP has no incentivized liquidity, still does high volume, and is an organic token that is well distributed.

The way we launched JUP inspired a new wave of launches under the LFG Launchpad, and spawned more launchpads like Bonk.live.

Conclusion

The $JUP launch marked the start of a meteor(a)ic rise of Meteora’s DLMM, and the beginning of its usage as a launch technology instead of a launchpad.

We’re continuing to innovate on the launch technology space, launching many unique ways to launch a token (soon), while improving the DLMM’s technology as a core tool to provide liquidity and capture volume.

We’ll be adding all of these innovations to launch.meteora.ag, the key one place where you can find everything about Meteora and launchpad technology.

Look forward to many more ways to deploy a token with Meteora — come find us in ‘#launch-guide’ on Discord if you need help.

Overall, it was fun doing a banger of a launch for the first time.