Solana's SOL Drops 9% Amid Staking Unlock, Memecoin Wane
2min read Solana’s native token, sol, experienced a 9% decline between March 28 and April 4. Despite this price downturn, several key metrics on the Solana network showed growth during the same period. The network maintained its second-place position in deposits and trading volume, outperforming competitors such as BNB Chain, Tron, and Ethereum layer-2 networks like Base and Arbitrum. This resilience has led traders to speculate on how long it will take for SOL’s price to reflect this onchain strength.
One factor contributing to the decline in investor interest in SOL is the April 4 staking unlock of 1.79 million SOL, valued at over $200 million. These tokens were staked in April 2021 when SOL was trading near $23, creating significant selling pressure. Additionally, the waning interest in memecoins, which had been a major driver of new user adoption on Solana, has further dampened growth in activity and price gains.
Several meme-themed cryptocurrencies, including WIF, PENGU, POPCAT, AI16Z, bome, and ACT, saw declines of 20% or more over the past week. However, despite these market conditions, the Solana network demonstrated notable resilience. Its Total Value Locked (TVL) reached the highest level since June 2022, and decentralized exchange (DEX) volumes showed strength. Deposits in Solana network’s DApps rose to 53.8 million SOL on April 2, marking a 14% increase from the previous month. In US dollar terms, the $6.5 billion total stands $780 million ahead of its closest competitor, BNB Chain. Solana’s top DApps by TVL include Jito (liquid staking), jupiter (leading DEX), and Kamino (lending and liquidity platform).
Solana’s onchain data shows greater resilience compared to its competitors. In decentralized exchange (DEX) volumes, Solana holds a 24% market share, while BNB Chain accounts for 12% and Base captures 10%. While Ethereum has regained the lead in dex volumes, Solana has shown strong resilience following the memecoin bubble burst. For context, Raydium’s weekly volumes dropped 95% from the $42.9 billion all-time high reached in mid-January. Still, Solana has demonstrated that traders appreciate its focus on base layer scalability and integrated Web3 user experience despite ongoing criticism related to maximum extractable value (MEV).
MEV occurs when validators reorder transactions for profit. This practice is not unique to Solana, but some market participants have raised concerns about insider gatekeeping. While not stated directly, the criticism likely refers to incentives provided by Solana Labs to offset the high investment and maintenance costs required by certain validators. Supporters of changing Solana’s token emissions argue that rewards earned through MEV already provide sufficient incentives for validators to secure the network, eliminating the need for further inflationary pressure on SOL. Meanwhile, Loring Harkness, a core contributor to Shutter Network, advocates for encrypting transactions before they enter the mempool as a way to prevent validators from manipulating their order.
Ask Aime: How long will it take for Solana's price to reflect its onchain strength?
Solana’s growth in TVL and resilience in DEX market share may not be enough for SOL to retest the $200 level seen in mid-February. However, it has firmly secured its second-place position behind Ethereum as a leading platform for decentralized applications, supported by consistent activity, infrastructure development, and growing interest from both developers and users. This resilience suggests that despite short-term price fluctuations, the underlying strength of the Solana network continues to attract users and developers, positioning it as a key player in the decentralized finance ecosystem.
