Jupiter investors chafe at DAO plan to dish out $140m to team members

Jupiter DAO, the digital collective behind Solana’s biggest decentralised exchange aggregator, voted on Monday to give the project’s creator a bigger stake in the project.

The vote passed with 63% approval and gives Jupiter’s pseudonymous creator, Meow, a 7% allocation of the protocol’s token supply, a stake worth $250 million.

But that’s not why the vote was controversial.

Meow’s increased stake is in exchange for fronting the salaries and bonuses of 65 new team members with his previous allocation of 280 million Jupiter tokens, now worth $140 million.

Some DAO members criticised the size of the compensation package and argued it was poor capital management.

“Community funds should be used for community projects and team funds for the team,” said one DAO governance participant who goes by Pyhtonia.

Locked for three years

Other aggrieved Jupiter investors say the planned compensation package dilutes the value of their holdings even though the tokens earmarked for the team salaries will be locked for at least three years.

But defenders argue that top crypto talents should receive appropriate compensation.

“If you don’t like what Jupiter is paying engineers, you need to realise this is much bigger than one company, or even ‘our industry’,” Edgar Pavlovsky, a core contributor at Paladin, a Solana client, posted on X.

“There’s a global market that’s driving this.”

Jupiter co-founder Siong Ong said crypto protocols have to compete with technology giants such as Meta and Google that offer attractive salaries to secure the best talents.

“Any day, any time, I will defend the team allocation for this exact reason,” Ong said.

Higher salaries

Software engineers in the US earn $163,000 on average, according to Glassdoor.

Those who work for FAANG companies ― Facebook, Amazon, Apple, Netflix, and Google ― the calibre of talent the Jupiter hierarchy say they are keen to attract can command even higher salaries.

‘Any day, any time, I will defend the team allocation for this exact reason.'

—  Siong Ong, Jupiter

The dispute is the latest instance of DAO investors growing unsatisfied with project teams securing huge salaries despite the crypto market downturn.

DeFi investors are increasingly demanding project teams to deliver value for their protocols to make their investments worthwhile.

Reduce spending

For investors, large compensation for team members without delivering commensurate earnings for the projects only serves to deplete the treasuries of DeFi protocols.

DAO reserves have crashed to $17 billion, an almost 50% slump since the start of the year, based on data from DeepDAO.

Some DAOs, such as Aave and Nouns, have enacted cost-cutting measures. Aave DAO members want to review a governance proposal to reduce spending.

Jupiter team members contacted by DL News did not respond to requests for comments.

All of this comes as Jupiter’s token is in freefall and crashed to an all-time low of $0.45 this week, less than two months after peaking at $2.

While the broader crypto market is in decline, Jupiter’s 75% price crash exceeds the market average mostly due to the implosion of memecoins which have been popular on Solana.

Backlash

Jupiter, as a major player in the memecoin sector, has seen its weekly earnings from fees fall to $20 million from $42 million at the memecoin peak in January, data from DefiLlama shows.

It’s also not the first time Jupiter has courted controversy over salaries for team members.

Last year, there was considerable backlash over a budget proposal, which later passed, to spend $7 million in total to pay the salaries of four team members.

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at osato@dlnews.com.