Token burning: how Jupiter manages supply

In traditional finance, when a company wants to return value to its shareholders, it can buy back its own stock from the open market and retire it. Apple, for example, has bought back hundreds of billions of dollars of its own stock since 2012, a common practice on Wall Street. As the number of shares outstanding decreases, each remaining holder owns a slightly larger piece of the company. A similar principle applies in crypto, and it’s called token burning. While in the stock market this information can be difficult to track down, a blockchain gives you permanent, transparent and verifiable data.

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What is token burning?

When a token is burned, it is destroyed for good, which decreases the token’s supply. To understand the impact, three numbers matter:

• Max supply: the maximum number of tokens that can ever exist under the token’s rules.
• Total supply: the number of tokens that currently exist onchain, meaning every token minted so far minus every token burned. It changes over time.
• Circulating supply: the portion of the total supply that is actively in the market, meaning the total supply minus tokens that are locked, still vesting, or held in a treasury.

A burn directly reduces the total supply, because the tokens are destroyed and removed from onchain accounting. Whether it also affects the circulating supply depends on where the burned tokens came from: burning tokens from a treasury reserve doesn’t change the circulating supply, while burning tokens that were already in circulation reduces both. For example, take a token with a max supply of 1,000, a total supply of 1,000 and 900 tokens in circulation. If the team buys back 10 tokens on the open market and burns them, the total supply drops to 990 and the circulating supply drops to 890. When burns remove more tokens than are newly issued, the supply shrinks over time and the token is called deflationary. That is the opposite of an inflationary system, where new tokens keep being minted faster than any are removed.

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How do you burn a token?

There are three main ways to take tokens off the market. Each works a little differently, and only the first one actually destroys tokens.

• Direct burning: the token program’s burn instruction destroys the tokens and reduces the total supply. Projects call it directly or through dedicated tools. This is the mechanism formally known as a burn.
• Locking: projects can lock tokens with a tool like Jupiter Lock. Locked tokens are out of circulation for as long as the lock lasts, but every lock has an end, and some can be canceled depending on their permissions. A lock delays supply rather than removing it.
• Dead address: tokens can also be sent to a “dead address”, a wallet for which no one holds the private key. Those tokens are lost forever, but they still exist onchain, so depending on the data source they may still be counted in supply figures. Practically speaking, they are permanently off the market.

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Jupiter’s burn mechanisms

Jupiter has several mechanisms that reduce the supply of JUP. Supply reduction: Jupiter carried out a community-approved reduction of the total JUP supply. The Supply Reduction Proposal explains it and its rationale. Litterbox Trust: since February 2025, 50% of Jupiter’s onchain revenue goes to the Litterbox Trust, a non-profit entity that buys JUP on the open market through automated, programmatic onchain purchases. The trust functions as a long-term strategic reserve, and it has burned approximately 134 million JUP to date. You can follow its wallet on Solscan. Fee burns: two token services charge 1,000 JUP per submission, which Jupiter burns through a multisig wallet rather than keeping:

• Express Review, for creators who want a faster review of their token’s verification request. It guarantees a first review within 24-48 hours, with up to 2 further reviews if needed. Standard Review is free, so only Express requests burn JUP.
• Token metadata updates, for anyone who submits a change to a token’s name, symbol, logo or other details across Jupiter.

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Why burns matter to holders

For holders, a burn permanently reduces the total supply. It doesn’t guarantee any impact on price, and unlocks and staking rewards can still add to the circulating supply. What a burn does offer is a commitment anyone can check: unlike a stock buyback disclosed in a quarterly filing, a burn is an onchain transaction, visible to anyone on the blockchain. To see how burns fit into the bigger picture, read JUP tokenomics and the Jupiter governance guide.

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