Solana Dominates DeFi — So Why Is SOL Crashing?

When the crypto market succumbs to hype and spectacular narratives, fundamental signals get drowned out by noise. However, it is precisely in these phases of disconnection between valuation and on-chain data that true dynamics take shape. Solana embodies this paradox today. Driven by metrics in clear progression, yet underestimated by the market, the blockchain offers a very real potential that few seem willing to confront.

An on-chain performance that defies market trends

While the price of SOL fell by 9% between March 28 and April 4, on-chain indicators from the Solana blockchain displayed a positive dynamic. Deposits in the decentralized applications of the ecosystem reached 53.8 million SOL on April 2, a record since June 2022, reflecting a monthly increase of 14%.

Converted into dollars, this represents 6.5 billion, which is 780 million more than BNB Chain, Solana’s main competitor in this segment. This increase solidifies Solana’s position as the second DeFi ecosystem behind Ethereum, despite a less favorable global context.

Several elements support this remarkable performance:

• Jito, the liquid staking protocol, is among the leading platforms in terms of TVL on Solana.
• Jupiter, now the flagship DEX of the ecosystem, continues to attract significant trading volumes.
• Kamino, focused on lending and liquidity management, completes this trio of dominant DApps.
• Solana now captures 24% of the DEX market share, compared to 12% for BNB Chain and 10% for Base, according to DefiLlama data.
• Even after the burst of the memecoin bubble, volumes on DEXs remain solid, demonstrating sustained activity on the base layer of the network.

This growth in deposited value and transactional activity reinforces the idea that Solana today operates in a structural logic, driven by its infrastructures and no longer solely by speculative effects.

Underlying tensions

Alongside these encouraging technical indicators, several elements have weakened the price of SOL in the secondary market. First, on April 4, there was the unlocking of 1.79 million SOL tokens, representing an estimated value of over 200 million dollars.

These tokens, initially staked in April 2021 when SOL was valued at around 23 dollars, may have been resold for profit, which generated significant selling pressure. Furthermore, the Solana ecosystem suffers from the current disaffection for memecoins, which largely contributed to its adoption in recent months.

Tokens such as WIF, PENGU, POPCAT, BOME, and AI16Z have seen their value drop by over 20% in seven days, which has dried up part of the speculative volume.

However, beyond the short-term view of the crypto markets, the governance of the network itself raises questions. Recent criticisms have highlighted the practices of Maximum Extractable Value (MEV) on Solana, a phenomenon where some validators reorder transactions to maximize their profits.

While this practice is not unique to Solana, it provokes growing controversy regarding the network’s transparency. Cbb0fe, a DeFi liquidity provider, recently expressed on February 18, 2025, on the X platform (formerly Twitter) his concerns about the presence of “gatekeeping” in block validation.

Additionally, some actors in the crypto ecosystem, like Loring Harkness (a contributor to the Shutter Network), propose solutions like encrypting transactions before they enter the mempool to reduce these opportunistic practices.

In the long term, these debates touch on the economic balance of the network. Voices are rising to lower the issuance rewards of the SOL, as the revenues from MEV are sufficient to incentivize validators. While this debate remains technical, its implications are profound. They condition the network’s security, as well as its perception by investors. In this perspective, even if Solana’s fundamentals improve, a return to higher levels will require a tighter alignment between technological performance, transparency of practices, and trust in the crypto market.