On-Chain Liquidations Outpace CEXs as Solana Surges Past $220

Over $17 million in short positions were liquidated as the Solana price surged past $220, a level not seen in eight months. This price movement triggered a wave of forced closures, as traders who had bet against the asset were caught on the wrong side of the rally. The liquidations created a feedback loop, adding upward pressure to the Solana price. From its June low near $125, the recovery has been sharp, reflecting the rapid and often volatile nature of crypto markets.

The venue of these liquidations is a significant development. On-chain perpetual contracts have surpassed centralized exchanges in liquidation activity. Recent data shows that $37.4 million in liquidations occurred on on-chain platforms, compared to $20.9 million on centralized exchanges. This represents an 80% gap in favor of decentralized platforms. Notably, the trend has been consistent, with on-chain liquidations reaching $47 million in May compared to $31 million on centralized exchanges. This shift indicates a broader movement away from the traditional centralized model in favor of on-chain infrastructure.

The Solana price rally is being driven by growth in decentralized finance (DeFi) platforms such as Drift Protocol, which processes billions in monthly trading volume. With over $1 billion in total value locked, Drift has become a central hub for decentralized perpetual contracts on Solana. These developments suggest that what was once considered experimental is now capable of handling institutional-scale trading flows. Traders are increasingly trusting on-chain systems to manage large price movements, and these platforms have proven their capacity to support such activity.

Institutional confidence in Solana is also growing, with a Nasdaq-listed firm holding around $95 million worth of the asset. Additional commitments include a $1.6 billion allocation to treasury reserves by another firm, supported by major investment firms like Multicoin Capital and Galaxy Digital. The launch of the first Solana staking ETF in the U.S. has driven futures open interest on the CME to $1.5 billion. These developments signal a shift toward broader institutional adoption, which has a stabilizing and confidence-boosting effect on the asset’s price trajectory.

Analysts are optimistic about Solana’s near-term price potential, with targets ranging from $250 to $300, and some projecting as high as $350 if current momentum is sustained. These forecasts reflect the structural changes taking place in the trading ecosystem, particularly the dominance of on-chain perpetual contracts in liquidation activity. The shift in where price discovery occurs—now increasingly on decentralized platforms—means that liquidity and reversal dynamics are evolving, potentially leading to faster and more unpredictable price movements.

This transition is not unique to Solana. Across the broader crypto market, decentralized exchanges (DEXs) are gaining market share relative to centralized exchanges (CEXs), with volume on DEXs rising while CEX volumes decline. In the last quarter, the DEX to CEX volume ratio reached a record high, reflecting a growing preference for platforms that offer greater transparency and control. Solana’s dramatic liquidation events serve as a clear example of this shift, as the network’s on-chain infrastructure handles increasingly large trading volumes and liquidity flows.