Solana Surpasses Ethereum in Staking Market Cap—Breakthrough or Temporary Surge?
Solana (SOL) has officially edged past Ethereum (ETH) in staking market capitalization, marking a significant moment in the ongoing rivalry between two of the most prominent blockchain networks. According to the latest data from StakingRewards, Solana's staked assets now total $53.15 billion, narrowly overtaking Ethereum's $53.72 billion.
While the difference may seem marginal, the implications have stirred considerable debate across the crypto landscape. Is this a sign of Solana’s growing maturity, or a temporary spike driven by yield-hungry investors?
High Staking Yields Push Solana Ahead
Solana’s appeal to stakers is clear: approximately 64.86% of its circulating supply is currently locked in staking, offering an attractive annual percentage yield (APY) of 8.31%. In comparison, Ethereum has just 28.18% of its supply staked with an APY of 2.98%.
This high yield has attracted users looking for passive income in a volatile market. However, it’s not without criticism. One of the core concerns is Solana’s lack of a robust slashing mechanism—a system that penalizes validators for misbehavior or downtime.
Ethereum researcher Dankrad Feist called this out on X (formerly Twitter), saying, “It’s very ironic to call it ‘staking’ when there is no slashing. What’s at stake? Solana has close to zero economic security at the moment.”
Whale Movements Show Mixed Sentiment
Large investors, or “whales,” have been both buying and selling SOL in recent days, suggesting uncertainty around the token’s near-term performance.
On April 20, a major investor unstaked 37,803 SOL (worth over $5 million). In contrast, Galaxy Digital removed over 600,000 SOL from exchanges during the previous week, likely for long-term holding or staking.
Similarly, Binance saw significant activity: over 370,000 SOL tokens, valued at nearly $53 million, were withdrawn. Meanwhile, US-based Janover increased its SOL holdings to 163,651.7 tokens (worth $21.2 million) and partnered with Kraken to begin staking.
Price Action and Technical Outlook
At the time of writing, SOL was trading at $140.49, marking a 3.53% gain in 24 hours and a 14.34% rise over the past week. Analysts identify $129 as a critical support level and $144 as immediate resistance. A break above this barrier could drive further upside momentum, while a fall below support might prompt increased selling.
Beyond the charts, Solana continues to improve its infrastructure. Innovations like the QUIC protocol for faster data transfer, a hybrid Proof-of-History and Proof-of-Stake model, and new validator client diversity are all helping to strengthen the network.
The launch of the Solang compiler—allowing Ethereum developers to port Solidity-based smart contracts to Solana—could further enhance the platform’s utility and attract more development activity.
Ethereum Still Has the Edge in DeFi
Despite Solana’s latest milestone, Ethereum remains the leader in decentralized finance (DeFi) and institutional adoption. Its slashing mechanism ensures higher network security, and its lower staking ratio may be a conscious strategy to keep liquidity flowing through DeFi protocols.
By contrast, Solana’s higher staking rate could reduce its DeFi liquidity, raising questions about how it will balance staking incentives with the needs of its broader ecosystem.