Jupiter Perpetuals Liquidity Provider Token (JLP) is a token representing a share in a liquidity pool used on the Jupiter Perpetuals exchange. It is valued based on an index fund composed of various cryptocurrencies. ^[1]

Overview

The Jupiter Perpetuals Liquidity Provider Token (JLP) functions as a liquidity provider token for the perpetuals trading platform on Jupiter, a decentralized exchange aggregator on the Solana blockchain. The value of JLP is derived from the underlying assets held within the JLP Pool. This pool typically includes a basket of cryptocurrencies such as SOL, ETH, WBTC, USDC, and USDT.

Participants who hold JLP tokens are essentially providing liquidity to the perpetuals market. This liquidity allows traders on the platform to open leveraged positions by borrowing assets from the pool. In return for providing this liquidity, JLP holders can earn fees generated from trading activities, specifically hourly borrow fees paid by traders based on the amount of tokens borrowed. The performance of the JLP token is directly tied to the performance of the underlying assets in the pool and the fees generated by the perpetuals trading platform. ^{[1] [2]}