- Solana briefly surpassed Ethereum in total staked value, driven by strong price gains and high staking yields.
- However, critics argue this may be bearish, as it discourages DeFi activity and raises concerns about network security.
In a surprising twist in the crypto space, Solana has briefly overtaken Ethereum in total staked value — a headline-grabbing moment that has triggered fierce debate about what it truly means for both networks.
According to on-chain data, over $53.9 billion worth of SOL is now staked by more than 500,000 wallet holders, offering an annualized return of 8.31%. This figure briefly eclipsed the value of staked ETH, which currently sits at $53.93 billion, secured by 34.7 million tokens.
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While on the surface this appears to be a bullish milestone for Solana, critics argue the story isn’t so straightforward.
A key reason behind this flippening is SOL’s stellar price performance. Since June 2023, SOL’s price relative to ETH has grown nearly tenfold, fueling its staking dominance. However, this high return may be too attractive — discouraging users from participating in Solana’s DeFi ecosystem. Why take risks in yield farming or liquidity pools when staking offers such strong passive income?
This concern isn’t new. Multicoin Capital’s Tushar Jain previously stated that Solana DeFi has been stifled by the high “risk-free” staking yield. In contrast, Ethereum, with a lower staking yield of 2.98%, still boasts over $50 billion in total DeFi value locked, compared to Solana’s $8.85 billion.
There’s also a structural debate around staking security. Ethereum’s model includes automatic slashing for misbehavior, while Solana’s approach currently lacks automatic penalties. “It’s ironic to call it staking when there is no slashing. What’s at stake?” noted Ethereum researcher Dankrad Feist.
Solana Labs is working on this, aiming to implement a “correlated slashing” mechanism later this year, but until then, critics argue that Solana’s network security is still maturing.
So, is Solana’s flip a bullish sign of momentum — or a symptom of deeper challenges? While it signals growing investor confidence, the long-term verdict may depend on how Solana addresses DeFi engagement and network security in the months ahead. Either way, the staking wars are heating up — and neither side is backing down.