Solana's $200M Token Unlock Triggers 4% Price Drop, Network Activity Declines 80%

Solana recently experienced its most significant single-day token unlock, with over $200 million worth of SOL entering circulation. This event occurred amidst a noticeable decline in investor interest in the network. More than 1.3 million SOL tokens were released from staking on April 4, marking the largest single unlock of staked SOL expected until at least 2028. These tokens, initially staked in April 2021, have seen their value increase nearly fivefold from their original positions at current market prices.

Further data indicates that approximately 425,000 SOL, valued at nearly $50 million, have already been unstaked. Of this amount, more than 280,000 SOL tokens, worth around $33 million, were quickly transferred to centralized exchanges. This activity suggests that some holders may be preparing to take profits or exit their positions.

This token release follows another large unlock in March when the FTX bankruptcy estate released 11.2 million SOL worth $1.3 billion. Earlier this month, FTX also received an additional 12,687 SOL, valued at around $1.47 million, indicating the continued movement of assets tied to the failed exchange.

The token unlock coincides with a broader decline in Solana’s network activity. After briefly overtaking Ethereum in decentralized exchange (DEX) volume earlier this year, Solana’s dominance has since dropped to levels last seen in late 2024. Data shows that DEX volume on Solana plummeted 80% to $52 billion in March, down from a peak of over $250 billion in January. The network’s total value locked (TVL) has also halved from a January peak of more than $12 billion to just $6.4 billion.

Market analysts attribute this decline to fading memecoin speculation, which has triggered lower trading volumes, reduced liquidity, and shrinking network revenues. In line with these developments, SOL’s price has taken a hit. The token dropped over 4% in the past day, underperforming the broader crypto market. SOL fell to a low of $112 but has slightly recovered to around $118 at the time of writing.

The recent token unlock and the subsequent transfer of a significant portion of SOL to centralized exchanges raise concerns about potential selling pressure. This could further impact the network's activity and investor sentiment. The continued movement of assets tied to the FTX bankruptcy estate adds another layer of uncertainty to the market. As Solana navigates these challenges, it remains to be seen how the network will adapt and whether investor interest will rebound in the coming months.