Tailoring Jupiter's Token Rewards to Each User
A data analysis report
Introduction
Can JUP do a 10x after its launch?
The founder of Jupiter aggregator, with the pseudonym, weremeow, has set a realistic goal for this new token. He believes the token and its underlying protocol would hit a 10x. Is it possible?
A popular saying goes: “Show me the incentives and I’ll show you the outcome”.
Jupiter is riding well on this path, as it is set to conduct the first round of its four-round airdrop.
However, the community has expressed fears about upcoming airdrops as new users may be airdrop farmers. This is a major concern as Weremeow addressed in his tweet, “Careful and strategic emissions are of course crucial, that’s why we are fostering a tight culture of communicating strategy and getting feedback for every major phase”.
As a Jupiter user myself, the right strategies must be implemented for future token drops, if not for anything, but for my bags😅.
Before the main tea, let me quickly introduce Jupiter.
What is Jupiter?
Jupiter is a leading deFi aggregator built on the Solana blockchain. It allows users to trade cryptocurrencies directly with each other, without relying on a central authority.
Why Investigate Jupiter?
These investigations serve as a tool, a magical weapon that unlocks the secrets of the average user - what they traded, how they traded, and what made them stick. It grouped users into categories like "High Rollers" and "Cautious Cats" based on their trading behavior. With this investigation, Jupiter can understand its users better to reward them with tokens in a smart way, while building a happier, more engaged community.
Token Launch
Anticipation builds as Jupiter plans to launch the JUP token in the fourth week of January. This move is set to further solidify Jupiter's position and provide its community with a new dimension of engagement. Speaking of community, Jupiter proudly hosts a thriving congregation of traders and investors, forming a vibrant ecosystem.
Methodology
There are two tabs in my dashboard for Jupiter—overview and trading activity. The Overview Tab harnesses the power of SQL queries to analyze crucial metrics:
Active User Base: Daily and monthly engagement metrics.
Trading Volume: Daily and cumulative USD volume.
User Stickiness: The consistency of user return measured by the daily percentage of MAU actively engaging.
The User Trading Behavior Tab employs SQL queries to provide a comprehensive view of:
Trading Frequency and Intensity
User Preferences and Segmentation
Trading Volume and Value
Popular Token Pairs
Find in-depth methodology here
Platform Insights
Soaring Engagement: Daily stickiness consistently between 6-14%, showcasing robust user retention.
Explosive Growth: MAU surged from 95k-120k to 750k in December, a staggering 6x increase, with January maintaining strong momentum at 595k.
DAU Surge: Similar growth pattern, from 10k-20k to a high of 149k in December, nearly a 10x increase, with January surpassing November's average
Driving Factors
Solana Outperformance: $SOL's bullish run attracts new users, fueling ecosystem activity.
Memecoin Frenzy: Tokens like $BONK, $WIF, and $GUAC draw massive interest, propelling Jupiter as a key trading platform.
Aggregator Advantage: User preference for Jupiter's aggregation features boosts platform activity.
User Insights
Top Trading Pairs
SOL/USDC: Dominant pair with 540k distinct traders, indicating a preference for stablecoin liquidity and trading against SOL.
BONK/SOL: Memecoin frenzy contributed significantly, attracting 231k unique traders, revealing a segment seeking high-risk opportunities.
Other Pairs: SOL/USDT, HNT/SOL, and USDC/USDT see significant activity, showcasing interest in various stablecoins and alternative Solana projects.
Trade Volume and Frequency
The majority in Lower Trade Ranges, suggests a large segment of casual users or those exploring the platform.
Active Mid-Range Traders indicate a sizable group of participants with varying risk appetites.
Dominant Low-Frequency Traders reveal a large base of users with sporadic engagement.
Average Trade Size and Daily Volume
Usual Range: $70-$150, with daily volume per trader typically below $5k, indicating a platform dominated by smaller trades.
January Spikes: Outliers in January warrant further investigation into potential reasons and user segments involved.
User Personas and Tiered Token Rewards
User Personas
Casual Users
Engaging in sporadic trades below $10, potentially exploring the platform. Rewards include gamification and micro-incentives.
Stablecoin Specialist
Prefers established pairs for liquidity. Exclusive rewards for Dollar-Cost Averaging (DCA) into these pairs.
Memecoin Degen
Drawn to memecoin pairs. Rewards include airdrops, exclusive access to memecoin launches, and gamified challenges.
Active Traders
Making frequent trades within moderate value ranges. Rewards include early access to features and personalized tokenized rewards.
Tiered Token Rewards
Implement a tiered token reward system based on trading volume and frequency.
Offer exclusive access to platform features or events for high-value traders.
Develop a gamified loyalty program with points earned through specific actions.
Distribute airdrops or bonus tokens for holding or using specific tokens.
Partner with projects in the Solana ecosystem for cross-platform rewards.
Personalize token rewards based on individual user behavior and preferences.
Further Investigations and Assumptions
Further Investigations
January Spikes: Delve into the cause and implications of the January spikes in average trade size and daily volume.
Assumptions
Upcoming JUP Token Launch: Consider the potential impact of new token reward strategies on platform engagement and token value.