Jupiter Exchange faces backlash over seed phrase requirement for ASR rewards

Jupiter Exchange is facing community criticism after urging users to submit their seed phrases to the Jupiter wallet to claim ASR rewards for Q4 staking activities.

Jupiter, a Solana-based decentralized crypto exchange aggregator, has shocked the community by raising security concerns about wallet seed phrases. The DEX launched its ASR rewards for Q4 stakers, requiring users to export their seed phrases into the Jupiter wallet to claim rewards on mobile and desktop. The requirement has sparked widespread concern as community members push back against the rule, citing serious safety issues with submitting seed phrases.

Jupiter Exchange raises safety wallet concerns for Web3 users

Jupiter defended the requirement, stating that the measure is necessary to ensure fair distribution of rewards and prevent manipulation. However, discussions centered on the potential for exploits and the burden on users and long-term holders, who are likely to lose everything if malicious actors gain access to their accounts. According to Solana Floor, the decentralized exchange responded to the criticism, saying it will roll out an alternative method in the coming few weeks that will allow users to claim their ASR rewards from other wallets.

Jupiter has hosted an annual airdrop event, Jupuary, every January since 2024, as part of its in-house efforts to attract new users and retain existing ones. In 2024, the decentralized exchange distributed 1 billion JUP tokens, worth over $1 billion, to over 1 million crypto wallets. In 2025, the exchange hosted its second airdrop event, distributing 700 million tokens to loyal users and stakers. 

This year, the ecosystem planned an initial distribution of 200 million JUP tokens, with 170 million allocated to fee-paying users and 30 million to stakers. The DEX had also announced it would set aside 200 million JUP tokens as a bonus pool for holding and staking the airdrop throughout 2026. 

The move was intended to incentivize more community members to hold as many tokens as possible and to discourage selling pressure that typically follows an airdrop event. The exchange had also announced it had set aside 300 million JUP tokens for Jupnet incentives. The total token distribution event for the January 2026 ASR rewards amounted to 700 million tokens. The exchange had also announced that JUP stakers will be rewarded based on their time-weighted stake and emphasized that the eligibility window for fee-paying customers ended in January 2026.

Jupiter revises the token airdrop supply from 700M to 200M tokens

However, in November 2025, Cryptopolitan reported that Jupiter revised its Jupuary airdrop downwards, citing dilution concerns. The decision was reached through a vote by community members after what happened during the previous Jupuary event in 2025. 

The January 2025 event saw the ecosystem distribute JUP tokens to everyone, including new community members who had no intentions of being part of the community and its ecosystem in the long run. As a result, many of these new participants sold the token, causing JUP’s price to crash significantly.

The new revision reserved 200 million tokens out of the planned 700 million for the January 2026 Jupuary event. The publication also noted that the airdrop’s eligibility will change in accordance with the project’s DAO. The new revision will allocate 25 million JUP tokens to staking participants, with the remaining 175 million reserved for users performing fee-paying activities in the Jupiter ecosystem.

According to data from CoinMarketCap, Jupiter’s native crypto asset JUP ranks 74th among the largest cryptocurrencies, with a market capitalization of $648 million and a 24-hour trading volume of $57.22 million. The crypto asset is trading at $0.1994, down 90.24% since its all-time high of $2.04 achieved 2 years ago. 

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