Authors: Alex Xu, Research Partner at Mint Ventures & Lawrence Lee, Researcher at Mint Ventures
In a previous publication (Panning for Gold: Finding Long-term Investment Targets Through Bull and Bear Markets (2025 Edition Part One)), we sorted and introduced several projects in the lending track, such as Aave, Morpho, Kamino, MakerDao, as well as staking projects like Lido and Jito. This article, as the middle part of the series, will continue to introduce projects with strong fundamentals and long-term potential.
PS: This article reflects the phase thoughts of the two authors as of publication, which may change in the future, and the views expressed are highly subjective and may contain errors in facts, data, and reasoning logic. All opinions in this article are not investment advice, and criticism and further discussions from peers and readers are welcome.
3. Trading Sector: Cow Protocol, Uniswap, Jupiter
3.1 Cow Protocol
Business Status
Products and Mechanisms
Cow Protocol is a decentralized trading aggregation protocol, with its core product being the decentralized trading aggregator CoW Swap. The 'CoW' in the name stands for Coincidence of Wants, which directly matches the demands of buyers and sellers using a matching mechanism. CoW Swap uses batch auction matching as a price discovery mechanism, aggregating users' trading intentions (order demands) for unified settlement in each block.
This mechanism allows for direct matching of user orders without requiring traditional market makers or liquidity pools. When both parties wish to exchange the assets they need, the transaction can be executed directly, avoiding intermediate fees. For parts that cannot be matched directly, CoW Swap routes the remaining orders to decentralized exchanges (DEX) or other aggregators for liquidity. This design minimizes slippage and fees to the greatest extent and allows all trades executed in the same batch to share the same settlement price, eliminating price unfairness caused by the order of execution.
Additionally, CoW Swap introduced a Solver bidding mechanism: multiple third-party solvers compete to provide users with the best transaction execution plan, with the winner gaining the right to execute that batch of transactions and bearing the on-chain gas costs. Users only need to sign their order intentions offline and do not need to pay on-chain fees themselves; if the transaction does not occur, there are no trading costs. This 'intent matching + solver bidding' model makes the user experience more friendly (without worrying about gas losses from failed transactions) and provides a certain degree of MEV (Maximum Extractable Value) protection—since order matching occurs off-chain, solvers must bid to return MEV to users, making MEV attacks like front-running difficult to execute.
CoW Swap currently provides services on Ethereum, Arbitrum, Gnosis, and Base.
In addition to Cow Swap, another product of Cow Protocol is MEV Blocker, developed by CoW DAO in collaboration with partners such as Beaver Build and Agnostic Relay. After switching the wallet's RPC to MEV Blocker, users' transactions will go through a private searcher network (instead of entering Ethereum's public memory pool visible to all searchers, leading to MEV attacks), preventing sandwich attacks and front-running attacks from the source.
* The regular transaction process on the Ethereum network involves: users initiating transactions, which first enter the public memory pool; searchers monitor the memory pool for MEV opportunities and bundle transactions; builders receive the bundles from the searchers and construct blocks; validators receive blocks from builders, verify them, and add them to the blockchain.
Profit Model
Cow Protocol's revenue sources can be broadly classified into two categories:
1. Revenue sharing from Cowswap's trading surplus, which refers to the money saved for users by Cowswap through its bidding network, which currently charges 50% of the trading surplus for most networks, though fees do not exceed 1% of the trading volume. Additionally, for external protocols (partners) integrated with Cow Protocol, Cow Protocol will extract 15% as a service fee from the trading fees generated by partners (the proportion can be customized but does not exceed 1% of the trading volume). Finally, Cow Protocol also charges certain networks based on their overall trading volume, such as Gnosis and Arbitrum, with the current charging rate being 0.1% of the trading volume (excluding special trading pairs such as stablecoins).
2. Earnings generated by MEV Blocker, extracted from the earnings validators gain through MEV Blocker, at a rate of about 10%.
In the composition of protocol revenue, most of the income is contributed by the transaction surplus sharing from Cowswap, so the business data we will focus on later will also primarily center around Cowswap.
Business Data
We will focus on Cow Protocol's trading volume and protocol revenue as our two key business metrics.
Trading Volume
Data Source: Dune
As an emerging intent matching protocol, CoW Swap has experienced rapid development over the past three years. In 2021, the protocol was still in its infancy, with early trading volumes being small. Entering 2022-2023, Cow Protocol's business data began to improve with the rising demand for MEV protection and efficient aggregated trading in the DeFi space. In 2024, the protocol's trading volume soared further: monthly trading volume reached a new high at the end of 2024, with a single-month trading volume of nearly $7.8 billion in December 2024, and still close to $6.9 billion in February 2025, far exceeding previous years' levels.
It is worth mentioning that CoW Swap has increasingly attracted DAO organizations and professional institutions due to its provision of large, low-slippage trading solutions. In 2023, about one-third of DAO on-chain trading volume was completed through CoW Swap, and by February of this year, this proportion rose to 79.5%.
Data Source: Dune
Protocol Revenue
Data Source: Dune
Entering 2024, Cow Protocol began actively exploring protocol revenue generation, conducting multiple rounds of revenue tests, with income showing a steady growth trend month by month. January 2025 was the month with the highest revenue (calculated in ETH), with a single-month protocol income of 641 ETH, estimated at approximately $2.13 million based on an average monthly ETH price of $3,328. In February, income was 586 ETH, resulting in an estimated protocol income of approximately $1.56 million based on an average ETH price of $2,668.
Protocol Incentives
Data Source: Tokenterminal
Currently, Cow Protocol's main expenditure is token incentives for the Cow Protocol network solvers, with network solvers receiving Cow token rewards based on the quality of their provided trading solutions (the surplus saved for traders). According to Tokenterminal's statistics, the expenditure on Cow token rewards over the past year was approximately $7.4 million. For January and February 2025, the protocol's token incentives amounted to $858,000 and $961,000, respectively, lower than the relevant protocol revenues of $2.13 million and $1.56 million for the same months.
According to the Cow Protocol official disclosure of the 2024 project income and expenditure in January this year, excluding the development costs of the protocol, the expenditure for Solver token rewards in 2024 is approximately $5.2 million, while the annual protocol revenue is approximately $6 million, indicating that revenue has already exceeded token incentive expenditure.
Competitive Situation
The main battlefield for Cow Protocol is the decentralized trading aggregator field. This field was initially dominated by 1inch, but the landscape has diversified in the last two years. According to the latest data from The Block in March 2025 (not including UniswapX), 1inch's market share has dropped from the top position (on March 5, 1inch's Fusion feature was attacked, resulting in losses exceeding $5 million, exacerbating user concerns about its security), falling to second place with only 22.8%, while Cowswap has overtaken it with 33.85%, achieving the top position in monthly data for the first time.
Data Source: The Block
In addition to 1inch and CoW, the top five aggregators also include ParaSwap, 0xAPI/Matcha (the aggregation interface provided by the 0x protocol), as well as KyberSwap and Bebop, among others. These competitors each have market shares around 10% or less, with ParaSwap and 0x having a long history and stable user base, while KyberSwap (which transitioned to aggregation) and Bebop launched by Wintermute have both gained a certain number of incremental users recently. Overall, the competitive landscape of the DEX aggregation sector remains fierce, with new players continuously emerging. Although CoW Protocol has become the new leader in this field, its position is not yet secure.
In addition to traditional aggregated trading products, two other noteworthy competitors are Uniswap's UniswapX and UniversalX, a full-chain trading platform launched by Particle Network.
UniswapX
UniswapX is a cross-platform aggregated trading feature launched by the Uniswap team in the second half of 2023. UniswapX essentially provides users with a similar intent order + filler mechanism: users submit offline signed orders on Uniswap's front end, and third-party 'fillers' in the network (similar to the solver role in Cow Protocol) can take over the orders and trade on-chain for users. The process involves the filler providing a quote and enjoying exclusive matching rights for a short period; if not completed within the time limit, it enters a Dutch auction phase with more fillers participating in bidding. This model is similar to CoW Swap's solver bidding, both being off-chain matching with on-chain settlement solutions. Leveraging Uniswap's brand and large user base, UniswapX has quickly integrated into its front-end interface since its launch and has gone live on the ETH network. It is worth noting that there has been industry skepticism regarding UniswapX 'copying' CoW Swap's intent matching model, with voices including Curve's official position indicating that CoW Swap had pioneered the solver model long before, and UniswapX is not the first to do so. Despite the controversy, UniswapX has still rapidly gained considerable trading volume, achieving more than 10% of the EVM aggregated trading market share at the beginning of 2024 (at that time, Cowswap's share was around 14%), but subsequently, its market share has gradually declined. According to the data disclosed by Cow Protocol in March this year, UniswapX's market share in aggregated trading is around 5.5%.
UniversalX
UniversalX is another highly anticipated new project focusing on cross-chain aggregated trading. Launched by Particle Network and set to go live on the mainnet by the end of 2024, the goal is to facilitate trading of any on-chain asset without needing cross-chain bridges. Its core concept is 'chain abstraction': users can deposit assets from multiple chains into a unified on-chain account, using a unified balance to buy and sell tokens from any chain, while the platform automatically completes cross-chain exchanges and settlements in the background. As a new entrant in the aggregator field, UniversalX targets the niche of cross-chain trading, forming a certain differentiation from projects like Cow Protocol that mainly focus on single-chain aggregation. However, with the development of multi-chain ecosystems, UniversalX may face competition from Cow Protocol in the future if Cow Protocol expands to more chains or offers cross-chain functionalities.
Competitive Advantages of Cow Protocol
In the face of fierce competition, Cow Protocol has been able to rise and grow steadily, and its competitive advantages can be analyzed from two aspects: product and brand.
1. Product
The technological and mechanism advantages of trading products: Cow Swap is the first protocol to apply batch auction matching and solver competition to DEX aggregation, giving it a first-mover advantage. Its unique Coincidence of Wants direct matching mechanism allows transactions to be completed without traditional liquidity pools, reducing users' reliance on AMM pools and lowering slippage and fees. Meanwhile, the unified clearing price mechanism prevents price exploitation caused by the order of transactions, enabling heavy traders, especially institutional orders, to transact at fair prices. In contrast, later entrants like UniswapX and 1inch Fusion, while borrowing similar ideas, differ in their specific implementations: for example, CoW Swap employs a sealed auction process once per block, where all proposals are submitted simultaneously for optimal execution, minimizing MEV space. This mechanism is considered more effective than UniswapX's time-limited exclusive filling and Dutch auction in preventing unfair practices like front-running.
MEV Protection and Security: The dual product structure of Cow Protocol's trading service + MEV Blocker further enhances the resistance to MEV attacks, withdrawing user transactions from Ethereum's public memory pool and instead allowing trusted solvers to batch publish to Ethereum, effectively reducing the risk of front-running, sandwich attacks, and other MEV attacks. In addition, the protocol imposes strict limits on the slippage and execution results of solvers, mechanically compressing the space for miners and searchers to extract MEV. These measures make Cow Swap one of the trading platforms most focused on user protection. For large transactions and DAO treasury managers, such MEV protection is particularly attractive.
2. Brand
As the first trading product to introduce a batch auction matching and solver competition mechanism, combined with its anti-MEV product characteristics, Cow Protocol's value proposition of security and cost savings for traders has deeply resonated, gradually becoming the first choice for large traders, and this user habit is unlikely to change easily. Behind this user habit lies the brand and reputation accumulated by Cow Protocol based on its product, which is also the source of the protocol's eventual profitability.
The monthly active users of 1inch over the past year, data source: Tokenterminal
The monthly active users of Cow Protocol over the past year, data source: Tokenterminal
Main Challenges and Risks
Harsh Competitive Environment
The competition in the aggregated trading sector is intense, with established projects like 1inch, Kyber, and DoDo, and new forces like Bebop, nurtured by Wintermute. Additionally, products like CEX and wallets that are closer to users, with strong entry and front-end advantages, as well as abstract concept products like UniversalX, are actively exploring trading product innovations and striving for higher user penetration. Over the long term, their relationship with Cow Protocol is characterized by 'competition outweighing collaboration.' Therefore, although Cow Protocol's market share has now overtaken 1inch to rank first, maintaining this market share in such high-pressure competition is not easy and will directly suppress the protocol's bargaining power with users and suppliers (solvers), leading to a clear contradiction between the goals of 'market share' and 'protocol profit.'
Market Cycle
The overall downturn in the market cycle will lead to a shrinkage in total trading volume, impacting Cowswap's trading volume, which goes without saying. Other trading products are similarly affected, and further elaboration is unnecessary.
Binding with the EVM ecosystem
Currently, Cow Protocol only provides services within the Ethereum ecosystem. If the Ethereum ecosystem does not develop as well as other public chains, it will naturally suppress Cow Protocol's development space. The same risk applies to Uniswap, which will be mentioned later, and I will not repeat it.
Valuation Reference
COW Token
Cow currently has a total of 1 billion, and according to Coingecko data, the current circulation ratio is approximately 41.5%, with a projected token circulation inflation rate of 19.61% over the next year.
Currently, the primary use case for the Cow token is governance, and with the subsequent increase in protocol revenue, there may be token buybacks. It has previously attempted to stake Cow to reduce transaction fees.
Valuation
From a vertical valuation perspective compared to itself, as business data continues to rise, Cow's FDV has also reached new highs in this round (excluding abnormal values due to the extremely low circulation rate of tokens in the first month after the project launched), with the highest market value reaching a peak of $990 million at the end of December last year, followed by a significant drop, currently around $280 million.
We conduct a vertical comparison of Cow's PS value through the multiple of FDV to protocol revenue:
As shown in the above chart, although Cow's FDV has shown an upward trend over the past year, with the increase in business revenue, its PS value has shown a significant decline, making it more cost-effective compared to before.
From a horizontal comparison of competitors, 1inch is the most direct benchmark among the comparable projects in the aggregator field. Considering that 1INCH currently has no direct token value capture, and the protocol does not have stable, public protocol revenue, we mainly compare the FDV of the two protocols with trading volume.
As shown in the above chart, with the retreat of Cow prices and the rise of business data, its market value/trading volume ratio has fallen below that of 1inch for the first time since February 2025, achieving higher horizontal cost-effectiveness.
3.2 Uniswap
Business Status
Core Products
Uniswap is the largest decentralized exchange (DEX) on Ethereum, with its main products including its DEX protocol (now deployed on the Ethereum mainnet and multiple expansion chains) and the recently launched Unichain exclusive Layer 2 network.
The fee switch mode of the Uniswap protocol has not yet been activated, so the protocol itself has not generated direct revenue in the past (but Uniswap Labs charges a 0.15% interface service fee for token trades on its official front end).
However, the Unichain launched in November 2024 will subsequently distribute fees from transaction sorters to UNI holders through staking UNI, thus directly allocating value to UNI holders without activating the fee switch.
Business Data
For Uniswap, the main business metrics are trading volume and fee; for Unichain, we primarily focus on the number of active addresses on-chain, the main ecosystem, and the scale of funds on-chain.
DEX Trading Volume and Fee
Uniswap's trading volume and fee, Source: tokenterminal
Overall, Uniswap's trading volume has continued to grow with the market's development, reaching historical highs in monthly trading volume in March and December of the past year. However, recently, as the market has cooled, trading volumes have noticeably declined.
It is noteworthy that in this market cycle, Uniswap's Fee metrics have not surpassed the peak and second peak of the previous cycle, indicating that fee ratios have been declining as the cycle progresses, leading to intensified competition among LPs.
Multi-chain Data
Thanks to its multi-chain deployment (currently covering 11 EVM chains), especially with Base launched by Coinbase, Uniswap's active user numbers also reached a new high of 19 million in October last year. The growth rate of this business data far exceeds that of trading volume, demonstrating L2's capability in attracting new users.
The multi-chain distribution of Uniswap's monthly active addresses, Source: tokenterminal
Of these, Base is the main force of active users, accounting for 82% of Uniswap's active users across all chains.
Source: tokenterminal
However, in terms of trading volume, Ethereum remains Uniswap's main battlefield, accounting for about 62% of the trading volume, followed by Arbitrum at 23%, and then Base at 8.4%.
Source: tokenterminal
Business Data of Unichain
Since its official launch in early February this year, Unichain has been growing rapidly, with the number of weekly active addresses reaching nearly 120,000 by early March, ranking 7th among all L2s, higher than well-known L2 projects like zksync, Manta, and Scroll.
Source: tokenterminal
However, the value of assets bridged to Unichain is still low, currently only around $14 million.
Source: tokenterminal
In terms of the ecosystem, Unichain has already listed over 80 ecological projects, but most actual businesses have not been officially launched. For example, in DeFi, besides Uniswap itself, the only well-known application currently online is Venus (with total deposits of $5.67 million).
Competitive Situation
Uniswap has still maintained its leading position in the DEX market of the EVM ecosystem over the past year, with an overall market share still ranking first, although the overall trend of market share continues to decline. The following chart shows the market share trends of all DEXs in the EVM ecosystem (including all EVM L1 and L2).
Source: Dune
The second place is Pancakeswap, and the third is Aerodrome, which are the leading DEXs on Bnbchain and Base (although Uniswap is also deployed on these two chains).
Source: Dune
ETH, Bnbchain, and Base are also the three chains with the largest trading volume in the EVM ecosystem, consistent with the market share ranking of Uniswap, Pancake, and Aerodrome.
As for Unichain, due to its short launch time, its ecosystem is still relatively weak, currently in the cold start phase of applications and funds. Besides a good growth in active user numbers, other business data still lag significantly compared to mainstream L2.
Competitive Advantages of Uniswap
Uniswap's competitive advantages can be summarized as follows:
1. Network Effects and Liquidity Depth
The largest liquidity pool attracts the most traders, and vice versa; more traders and trading volume attract more tokens to deploy liquidity here, forming a self-reinforcing cycle.
2. Stickiness from Brand and User Habits
As one of the earliest projects to promote the AMM model in the DeFi space, Uniswap has the highest brand (including recognition and legitimacy) and reputation. It holds a high mental positioning in the minds of both traders and liquidity deployers. Even in today's rich landscape of DEX and various aggregators, many users habitually trade on Uniswap's front end, even if it incurs an additional transaction fee. Uniswap's brand has also played a significant role in its L2 build, attracting many quality projects for testing and joining right from the L2 launch, leading to rapid user growth.
3. Multi-chain deployment ecological positioning
Uniswap has deployed products on most mainstream EVM chains and ranks among the top three in trading volume on most chains. This not only helps Uniswap secure its foundational position in the multi-chain era but also lays the groundwork for its subsequent multi-chain aggregated trading functionality, making it easier to achieve cross-chain liquidity interconnectivity.
Main Challenges and Risks
Intense Competitive Landscape and Impact of New Models
Although Uniswap still has a certain advantage in market share, on the one hand, its traditional Ethereum competitors, such as Curve, continue to hold the ground, and on the other hand, Uniswap's breakthroughs on other EVM L1 and L2 are not smooth, as each chain has its own strong local players competing with it (such as Pancake on Bnbchain, Aerodrome on Base, and Camelot on Arbitrum). More importantly, various new trading models pose challenges: RFQ protocols (Request-For-Quote) and batch auction matching models are on the rise, with projects represented by CowSwap allowing market makers (solvers) to quote directly, improving the pricing efficiency of large trades, reducing AMM slippage and MEV, and are favored by professional traders and whales, significantly diverting Uniswap's trading volume. Although Uniswap later launched UniswapX, which adopts a similar mechanism, it has not been able to slow down the growth of projects like Cowswap. Furthermore, products with clear front-end advantages, such as wallets and CEX, are also intensifying their efforts in trading scenarios, attempting to cut into the upstream of user behavior, which forces Uniswap to become a more passive 'price taker' in the face of fierce pricing competition.
Inefficient community governance, lack of value linkage for tokens.
Investors who have been following the Uniswap governance forum for a long time will mostly find that: compared to other DeFi projects with higher governance efficiency and better reputations (such as Aave), Uniswap's governance efficiency is very low, specifically reflected in slow speed, resource waste, and insufficient focus on strategic indicators. For specific examples: 1. The community's most concerned fee switch issue has been discussed for nearly three years without a resolution; 2. Various donations and budgets have been provided to research and organizations unrelated to Uniswap's North Star indicator (trading volume), but the results received have little benefit to the project. The low level of community governance and neglect of the value linkage of the Uni token, coupled with sluggishness, has clearly had a long-term negative impact on the price of Uni tokens.
Valuation Reference
Since Uniswap has not yet obtained formal protocol revenue and the Fee for Unichain is negligible compared to its market value, we use the ratio of Uniswap's market value to its Fee (PF) for both vertical and horizontal valuation comparisons.
Source: tokenterminal
From a vertical comparison perspective, Uniswap's PF in February this year was 6.77, at an absolute historical low. Since the issuance of Uniswap, there have only been three months lower than this indicator, namely May and June 2022 (Three Arrows Collapse) and April 2024 (Altcoin Market Correction + Uniswap Receiving SEC Wells Notice). In March, this indicator slightly rose to 7.26. From this perspective, the market currently appears to be extremely pessimistic about the prospects of the Uni token.
Source: tokenterminal
For horizontal comparisons, I have chosen projects that are also DEXs and are ranked just behind Uniswap in market share, Pancake and Aerodrome. I did not choose Curve because it currently has a main business of lending besides being a DEX, making it less comparable to the top three.
From the PF indicators of the three, it seems that Uniswap's valuation significantly exceeds that of Pancake and Aerodrome. However, we also need to consider two factors on top of that:
Uniswap has not conducted any token subsidies, while Pancake and Aerodrome are still conducting large-scale token subsidies, especially Aerodrome, whose token incentive value reached $27 million in February (see below).
Uniswap also has the second growth curve with Unichain.
Uniswap has performed better in building its multi-chain ecosystem; although Pancake has also deployed on multiple chains, its operational status shows significant differences compared to Uni, while Aerodrome is a single-chain DEX.
Overall, even considering the similarities between Uniswap and Pancake and Aerodrome businesses, the horizontal valuation comparison of its PF is weaker than that of the vertical comparison.
3.3 Jupiter
Business Status
Starting from aggregated trading, Jupiter has continuously expanded its product offerings and acquisitions, establishing a full-chain layout around Solana's on-chain trading, and horizontally extending to other chains and ecosystems. The main products within the Jupiter ecosystem include:
Self-operated trading products on the main site include aggregated trading (Instant), market orders (Trigger), and conditional orders (Recurring), which were the earliest products launched by Jupiter and also the most used. The daily transaction count set a record of 57 million transactions on January 20.
Source: Dune
The Trenches product on the main site, formerly known as Ape.pro, was a specific product tool targeting memes, consistent with the typical meme trading tool formats of Photon/GMGN, but by the end of February, after ape.pro merged into Trenches, its product format became quite similar to that of Jupiter's aggregated trading product.
The Perps product on the main site has a core product logic similar to GMX, providing leveraged long and short trades and yield farming for BTC, ETH, and SOL. This part's TVL peak exceeded $2 billion and was the main component of Jupiter's TVL, with average daily trading volumes nearing $1 billion during peak periods, making it Jupiter's primary cash flow business in its early stages.
Data for TVL (left axis) and trading volume (right axis) of the Jupiter derivatives exchange. Source: DeFillama
The above can be considered Jupiter's main products. In addition, there are the following products within the Jupiter ecosystem:
The meme trading platform Moonshot. In January 2025, Jupiter announced the acquisition of a majority stake in the meme trading platform Moonshot. Moonshot has emerged as a rising star in the meme trading space over the past six months, attracting numerous users with its smooth fiat deposit system and simple, seamless trading process, creating a coin listing effect on Moonshot, especially when TRUMP was launched.
The trading volume of Moonshot (left axis) and fees (right axis). Source: Dune
Liquidity platform Meteora. Meteora was founded by an early co-founder of Jupiter (Ben Chow). Although there is no clear control relationship with Jupiter, it is regarded as an important component of the Jupiter ecosystem. However, Meteora will subsequently launch its own token, and although Meteora belongs to the Jupiter ecosystem, its relationship with the JUP token is somewhat indirect.
LST product jupSOL, which quickly captured a significant market share after its launch in 2024, is currently ranked fourth after jitoSOL, bnSOL, and mSOL.
Market share of Solana LST (the gray block above represents jupSOL). Source: Dune
Launchpad LFG, in addition to the JUP token itself, also launched governance tokens ZEUS for the cross-chain communication protocol zeus, CLOUD for the LST protocol Sanctum, DBR for the cross-chain protocol debridge, and several other meme projects in 2024. Although the number of launched projects is relatively small, the quality is relatively high.
The portfolio management platform Jupiter Portfolio. In January this year, Jupiter officially announced the acquisition of the on-chain portfolio tracker Sonarwatch and launched Jupiter Portfolio on January 30.
Mobile wallet Jupiter Mobile, launched after acquiring Solana's mobile wallet Ultimate Wallet.
The all-chain network Jupnet, launched at the end of January this year, aims to achieve a single account accessing all chains, all currencies, and all commodities, although there is currently no directly experienceable version for end users.
Trading terminal Coinhall, acquired by Jupiter in September 2024, mainly provides trading for Cosmos ecosystem tokens. By acquiring Coinhall, Jupiter gained the ability to build its own trading terminal, and the construction of its Trenches product relies on this capability. Currently, on-chain trading for Cosmos ecosystem tokens is not frequent, averaging below $10 million daily.
Source: Coinhall official website
Besides the aforementioned C-end products, Jupiter has many other actions, such as acquiring Solana's browser SolanaFM. They also have many products in the pipeline, such as the all-chain network Jupnet.
From the perspective of product layout, Jupiter, as the largest C-end traffic entrance on Solana, covers almost all business directions except lending. Even in the highly evident 'mixed operation' situation of Solana, Jupiter's business reach remains the most extensive. Furthermore, they have expanded their business boundaries through relatively aggressive acquisitions besides self-operated efforts.
Profit Model
Currently, Jupiter's fee-generating businesses include:
Aggregated trading business (including Trenches) charges 0.05%-0.1%, market orders and DCA charge 0.1%.
Derivatives business refers to GMX's mechanism, mainly charging a 0.06% fee when opening and closing positions, along with borrowing fees, price impact fees, etc. However, not all fees from derivatives go to JupiterDAO; 75% of the fees are allocated to its liquidity providers (JLP), while the remaining 25% is extracted by JupiterDAO.
The rest of the businesses do not charge fees.
Token Incentives
Jupiter does not have a daily token incentive program, and its main incentives come from two rounds of retrospective airdrops.
Competitive Situation
Trading is the core service provided by Jupiter, while other businesses such as LST, Launchpad, and wallets can be seen as a means to recycle traffic generated from trading. Therefore, we primarily analyze Jupiter's competitive situation in aggregated trading and derivatives trading.
Aggregated Trading
In the competition for trading entry on Solana, Jupiter has quickly surpassed Orca and Raydium in early 2024, establishing an absolute advantage (accounting for 51% of Solana's trading sources in 24Q2, Source: Messari).
However, with the rise of meme and Pump.fun, trading tools specifically targeting memes, such as Photon, Trojan, Bullx, and GMGN, have quickly encroached on Jupiter's share in terms of trading entry, focusing on faster transaction speeds and more comprehensive meme trading support functions, becoming more recognized in the market as the 'Meme Trading Entry.' Jupiter launched a similar tool, ape.pro, in October last year, but the market response was lukewarm, and it was ultimately merged into the main site's Trenches product. The data reflects that Jupiter's trading source proportion in Solana dropped to 38% in 24Q5 (Source: Messari).
Meme trading accounted for 90% of the trading volume on the Solana network during the hype period, and the meme trading entry was fragmented, posing the biggest challenge Jupiter faces in aggregated trading.
Derivatives Trading
Jupiter's derivatives exchange has become the second-largest derivatives exchange across all chains, with trading volume only behind Hyperliquid, which we will introduce in the next article. Specifically, on the Solana chain, Jupiter has a clear advantage over its main competitor Drift, with recent trading volumes approximately 5-10 times that of Drift.
7-day derivatives exchange trading volume ranking. Source: DeFillama
From the perspective of DAU, there is also a significant gap between the two in the past month.
Data Source: Dune
In the derivatives trading field, Jupiter's position on the Solana network is unlikely to be shaken in the short term.
Main Challenges and Risks
Despite launching the Jupnet to expand its business across all chains, Jupiter's core business still primarily resides on Solana. The biggest unknown for Jupiter is whether the Solana network can maintain its prosperity and sustain active on-chain trading.
In addition to the aforementioned challenges of unfavorable competition for meme trading entries, Jupiter also faces challenges and risks including:
Business expansion is overly aggressive, with dubious outcomes.
Jupiter's business expansion is much more aggressive than that of most Web3 projects, with grand business ideas, frequently expanding business boundaries in the past year through acquisitions. However, many acquisitions have not achieved the expected results, such as the acquisitions of Moonshot and Coinhall.
Compared to the peak trading volume of $660 million and millions in revenue on a single day in January when it was acquired, Moonshot's daily trading volume has now sharply decreased to less than $5 million, with revenue not exceeding $10,000. Although Jupiter has not disclosed the acquisition price and payment details, for JUP token holders, acquiring Moonshot today would clearly incur a lower cost.
The trading volume of Moonshot (left axis) and fees (right axis). Source: Dune
The acquisition of Coinhall has helped Jupiter establish its meme trading product Trenches, but in terms of actual conditions, Trenches still has a significant gap from leading meme trading products like Photon, Bullx, Trojan, and GMGN in terms of both trading volume and visibility.
No self-built liquidity pool
Jupiter does not have its own liquidity pool; its supported Metrora has already launched a points program, and it is expected to initiate an independent token issuance process, which means that JupiterDAO or the JUP token cannot capture the trading fees generated from 'trading in the liquidity pool,' and this fee supports Raydium's business revenue, which exceeded $22 million in January this year.
Untested in Bear Market
In a bear market, many logics that were commonplace during bull markets may be disrupted. For instance, currently, meme trading users on the Solana chain exhibit a strong willingness to pay overall. They hardly react to the 0.05% fee required by Jupiter's aggregated trading, as competing meme tools charge between 0.5% and even 1%. However, in a bear market where trading enthusiasm declines, users' sensitivity to transaction fees will also increase, and Jupiter may fall into a contradiction between 'market share' and 'net profit'.
In addition, Jupiter currently has a product line including wallets, the all-chain network Jupnet, and the portfolio management tool Jupiter Portfolio, which are unlikely to generate revenue in the short term. Whether it can maintain such a large product line during the bear market is also a significant question.
Valuation Reference
The total amount of JUP is 10 billion, and at the end of January this year, 3 billion tokens were voted to be burned. Currently, the maximum circulating tokens are 7 billion, with an actual circulation of 2.63 billion, and the current circulation ratio is 38.5%. Of the currently uncirculated tokens, 810 million team tokens will be unlocked in the next 21 months, and another 700 million tokens will be released in the Jupiter airdrop in January next year, resulting in an inflation rate exceeding 40% in the coming year. JUP still belongs to the category of low circulation and high inflation tokens.
Current distribution of JUP tokens. Source: Jupiter Governance Forum
At the end of January, Jupiter announced that 50% of the protocol's revenue would be used to buy back JUP, with the repurchased JUP locked for three years.
The following chart shows the revenue of the Jupiter protocol since October last year as counted by DeFillama (note that the abnormal values in the statistics of Jupiter's aggregator revenue on February 10 and March 10 may be incorrect, but the author currently has not found other sources for Jupiter revenue statistics). It can be seen that Jupiter's main revenue still comes from derivatives trading (blue bars), which is certainly related to the significant decline in meme trading enthusiasm when the Jupiter aggregator fees were imposed.
Data Source: DeFillama
Since Jupiter just completed a significant economic model update at the end of January, charging 0.05%-0.1% for aggregated trading, the more relevant P/S data is from February and March.
Based on the income data collected by DeFillama, Jupiter's revenue in February was $31.7 million, with an annualized revenue of $380 million, corresponding to a PS (circulation) of only 3.65, while the PS (fully diluted) was 9.5; as of March 18, the revenue was $12.25 million, converting to an annualized revenue of $253 million, with a PS (circulation) of 5.45 and a PS (fully diluted) of 14.15.
Source: DeFillama
Whether in horizontal comparison with the previously mentioned Cowswap or vertical comparison with Jupiter itself, JUP's current valuation appears quite low.
Of course, all the above data are based on the boom of Solana; as Solana's popularity further declines in the future bear market, maintaining such high revenue will be challenging. We have already seen this trend in the data from March compared to February.
