GENERAL INTRODUCTION
The Jupiter token (JUP) value capturing implementations are primarily based on the wallets denoted as “LitterBox”, “Jupiter Aggregator Authority” (Indirect Dividends), and two executing accounts responsible for Governance, and Voting The latter two accounts contain within them additional accounts that hold the logic for various components such as proposals, voting rewards, token locker mechanisms, escrows, etc.
To better understand these multiple components, it seemed prudent to categorize them under “Governance System” and “Vote System”. Together, these implement the technical specifications for the Yield Incentivized Governance Implementation.
1. THE INDIRECT DIVIDENDS IMPLEMENTATION
The implementation of indirect dividends begins with the DEX Aggregator, as shown in the above VCIP diagram. The DEX Aggregator accumulates fees through trade volume, whereby 50% of the ~0.1% protocol take rate is allocated to the DAO Treasury to meet various operational and funding initiatives. The balance of the fee revenue is used to buy back JUP and is sent to the LitterBox wallet, where it is stored and locked.
The wallet responsible for the transfer function is denoted as “Jupiter Aggregator Authority” followed by an associated number from 1-n. It is important to note that both Aggregator Authority and LitterBox are categorized as wallet accounts and differ from their counterparts in the following section.
2. THE YIELD INCENTIVIZED GOVERNANCE IMPLEMENTATION
Governance System As depicted in the VCIP diagram above, the Governance System comprises three main accounts: Governor, Proposal, and Vote (others are: ProposalMeta, and OptionProposalMeta). These three accounts collectively manage the proposal creation, voting, and reward distribution processes.
The Governor account, initialized via the createGovernor instruction, serves as the central hub that the Jupiter Team interacts with to create proposals through the createProposal instruction, which takes arguments like proposalType (u8) and maxOption (u8) to define the proposal structure, subsequently creating a Proposal account.
This Proposal account holds the details of the governance proposal, such as its type and voting options. It is linked to the Vote account, which records user votes cast on the proposal, enabling the Governor to track voting outcomes and facilitate reward distribution for participants, as illustrated in the diagram’s “VoteOnProposal” and “ClaimRewards” interactions.
Voting System The Voting System, as shown in the VCIP diagram, includes mainly the Locker and Escrow accounts (with PartialUnstaking playing more of a secondary role), which collaborate to handle the staking of JUP tokens and provide users with voting power for governance participation. The Locker account, set up through the newLocker function, acts as the starting point for staking, as indicated by the “StakeJUP” interaction from the User in the diagram.
When a user stakes JUP tokens, the newEscrow function is triggered, establishing an Escrow account that links back to the Locker, identifies the user as the owner, tracks the staked token amount, sets the lock duration, and allows for voting power delegation, as shown in the “CreateEscrow” flow. Users can add more tokens to their stake using the increaseLockedAmount function, which updates the Escrow accordingly, and once staked, the Escrow grants voting power to the user, illustrated by the “ReceiveVotingPower” arrow back to the User, enabling them to engage in governance voting through the Vote account.
Once users exercise their voting rights through castVote, reward distribution becomes possible, allowing users to claimReward via the Governor in the previous section on a quarterly basis. It’s important to note that users who wish to unstake their tokens will be subject to a 30-day cooldown period, retaining the ability to vote but with a linearly decreasing amount of vote power.
Voting Power = Number of JUP Staked
Voting Rewards = Active Staking Rewards + Jupuary Airdrop
Active Staking Rewards = UsageFee (50M JUP) + ProjectTokenAllocation (0.75%)
Active Staking Reward Allocation =
Key Contracts:
- Litterbox: Wallet account to store JUP from buybacks.
- Jupiter Aggregator Authority (1…n): Wallet account to transfer JUP to Litterbox.
- Govern: Core logic for accounts related to the Governance System.
- Vote: Core logic for accounts related to the Voting System.