Jupiter Empire Expansion History: Is Vertical Integration the Endgame of the Cryptocurrency Industry?

Original Article Title: Jupiter Crypto Conglomerate
Original Article Author: Marco Manoppo, Investor at Primitive Ventures
Original Article Translation: Ashley, BlockBeats

Editor's Note: Jupiter announced several major initiatives at the Catstanbul Summit, including acquisitions, AI funding, token buyback and burn, as well as the launch of the fully interoperable chain network Jupnet, showcasing its vertical integration ambitions. This article analyzes its business strategy and discusses how in a permissionless crypto environment, brand, community, and user experience determine value capture, revealing the inevitable trend towards integration in applications.

The following is the original content (slightly reorganized for readability):

Last month, Jupiter made a series of major announcements at its flagship event, Catstanbul. To summarize—there was a wealth of information. There was the Burning Cat, acquisition announcements, and most importantly: Jupiter publicly acknowledged that its ambitions extend beyond the current ecosystem. In today's article, we will dissect Jupiter's latest business strategy and discuss why over a sufficiently long period, every crypto application that controls users will ultimately choose vertical integration to maximize value capture. Let's delve into it.

TL;DR

Acquisitions

Jupiter acquired a majority stake in Moonshot, a popular mobile trading app that generated $35 million in fee revenue following the Trump Meme Coin craze. At the same time, Jupiter also completed a full acquisition of Solana DeFi asset management tool Sonar Watch.

Funding Support

Jupiter is partnering with Shaw from ElizaOS to allocate $10 million in support of AI developers launching through Jupiter Launchpad.

Token Buyback

50% of Jupiter's protocol transaction fees will be used for JUP token buybacks.

Token Burn

3 billion JUP tokens (approximately $3.6 billion) have been burned to reduce supply and decrease the protocol's fully diluted valuation (FDV).

Jupnet

The Jupiter project is set to launch Jupnet, a fully interconnected network designed to integrate the entire crypto ecosystem into a single decentralized ledger, maximizing convenience for users and developers.

Truth be told, this is one of the strongest product roadmaps and new project announcements I've seen in recent quarters. The Jupiter team's execution is top-notch, from their extremely detailed communication (Meow basically posts long threads on Twitter every day) to the high level of transparency they maintain with the community, demonstrating outstanding execution capabilities.

Here's a typical example:

Jupiter recently released a transparency audit report, detailing the team's key fund flows. "We have been publicly tracking token movement since Genesis and have audited all token flows (excluding 1 JUP) twice, consolidating tokens into certified wallets."

Read that last sentence again. For any crypto protocol that has completed its TGE, making the best effort to track ownership of every token is crucial. Similarly, public companies clearly document the ownership structure of their shares. In the crypto space, tracking ownership is relatively more challenging due to the permissionless nature of blockchain, but there are still tools that can help teams achieve a high degree of accuracy in tracking.

Meanwhile, Uniswap…

Given enough time, every app will integrate vertically

The key point of today's article is this: the business strategy in the crypto world fundamentally differs from the business models in traditional permissioned environments.

Outside the crypto industry, enterprises typically build a "moat" through regulatory barriers, long-term B2B contracts, proprietary innovation, and so on.

However, in the crypto industry, this kind of "moat" largely ceases to exist because the permissionless nature of blockchain allows anyone to build on existing products, and users can almost always opt for alternatives.

Therefore, what truly matters is branding, user experience, and community, as with the industry's maturation, we will see more and more experienced entrepreneurs enter the crypto race, building on existing infrastructure and launching vampire attacks on existing industry giants.

Ironically, this mirrors exactly what Deepseek is currently doing with OpenAI.

Ultimately, in the cryptocurrency space, the "moat" will evolve into the following three points:

· Brand → Users trust you

· Genuine Community → Users want to be part of your organization and enjoy true ownership (via revenue sharing)

· User Experience → Users love your product

Aggregation Strategy in Permissionless Environments Is Wise

Prior to Jupiter's success, many were skeptical of the aggregation model, especially in the EVM ecosystem where the model didn't shine. For example, 1inch failed to surpass Uniswap in market value because most users still preferred using Uniswap directly (too lazy to switch) or opted for other MEV-friendly DEXs like CoW Swap.

However, in the Solana ecosystem, Jupiter managed to convince users that it offered the best trading experience, successfully aggregated traffic, and captured value.

Frankly, I'm not sure when this shift occurred. I remember during the 2020-2021 DeFi Summer, I used both Orca and Raydium while also trying early versions of Jupiter. If I recall correctly, by the end of DeFi Summer, the user experience of Orca and Raydium had become quite poor, reasons being:

· Lack of a unified token standard (e.g., multiple bridged versions of USDC)

· UI lag

This poor user experience could still be seen a year later.

Jupiter used to display the best trade path to prove its exchange rate was optimal. In hindsight, this was a very astute move as there wasn't a clear DEX market winner in the Solana ecosystem at the time. Even though Raydium had the highest market share, its market dominance was nowhere near Uniswap on Ethereum.

Exemplary Business Strategy and Operations

In simple terms, Jupiter excels in its core business—providing Solana users with the best token swap experience. Many protocols in the EVM ecosystem have attempted a similar strategy, but few have succeeded. Additionally, the Jupiter team was initially formed by Racoon Dev led by Meow, which means that during the bear market, they were able to sustain operations with a few engineers in low-cost emerging markets, minimizing fund consumption.

Not all successful startups need the "sexy startup angle"; many successful crypto entrepreneurs initially operated development studios. This "traditional service-oriented business" can teach extremely efficient cost management practices and show founders how to strategically tap into market opportunities.

By 2024, this savvy business operation capability was fully demonstrated in the Jupiter team.

In just 12 months, Jupiter acquired 5 teams:

· Moonshot: Acquired this platform focused on mobile meme trading

· SonarWatch: Acquired on-chain asset management tool

· Ultimate Wallet: Acquired self-custody wallet

· Coinhall: Acquired decentralized exchange terminal

· SolanaFM: Acquired blockchain explorer

Forgive my bluntness, but this is truly a genius-level move. Some of the acquired projects faced fierce competition and market challenges, making them excellent acquisition targets. Moreover, I have no insider information, but I wouldn't be surprised if these acquisitions were mainly done through the JUP token. Considering JUP's current FDV, the Jupiter team undoubtedly expanded its footprint at a low cost and onboarded a group of excellent developers.

Conclusion

This idea is not new. Nascent's Dan Elitzer wrote an article titled "The Inevitability of UNIchain" in 2022, with the core point being: "As applications scale, control over block space becomes increasingly important... The solution is to build a dedicated chain or Rollup managed by validators invested in the application's success."

My view is similar but more straightforward—this is an embodiment of human nature in capitalist business society: optimizing value capture, vertical integration.

The crypto industry is still operated by humans, and we still can't shake off our innate desire to control the value chain. Let's be realistic here.

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