Solana's Staked Value Surpasses Ethereum's, Driven by 8.31% Yield

On April 20, Solana briefly surpassed Ethereum in total staked dollar value, marking a significant milestone in the ongoing rivalry between the two major blockchain networks. According to staking data, over $53.9 billion worth of SOL was staked at its peak, narrowly surpassing Ethereum’s staked market cap of $53.7 billion on the same day. However, Ethereum quickly regained its top spot, with a staked value of $56 billion compared to Solana’s $54 billion at the time of reporting.

One of the most significant factors behind Solana’s rise is its attractive staking yield. According to data, SOL currently offers a network-level return of 8.31%, significantly higher than Ethereum’s 2.98%. This disparity may prompt users to stake their tokens rather than participate in lending or liquidity provision through DeFi protocols. Solana boasts a staking participation rate of around 65%, highlighting strong community involvement. However, it lacks aggressive slashing mechanisms for validators who misbehave, which has led to criticism from some observers who argue that while Solana encourages staking, it sacrifices economic security in the process.

Critics like Ethereum researcher argue that Solana’s staking mechanism lacks the economic security provided by slashing mechanisms. He wrote, “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.” Meanwhile, a crypto content marketer warned against drawing direct comparisons between the two networks, emphasizing that each chain has different priorities. Solana’s focus is on broad participation, while Ethereum balances rewards with network resilience and broader DeFi engagement. Ethereum’s staking ratio is about 28%, partly because users often find better returns elsewhere in the ecosystem. In contrast, the minimal risks associated with staking SOL make it more appealing but arguably less secure.

Solana's network revenue has also shown robust growth, reaching a two-month high of over $4 million in daily income. This increase in revenue, which includes transaction costs and out-of-protocol recommendations, underscores Solana's leadership in blockchain application income distribution. As of April 16, Solana accounted for 70.4% of all blockchain application income, further solidifying its position in the market.

Solana's strategic developments have also attracted industry recognition. The founder of Uniswap has highlighted Solana’s benefits for Layer 1 DeFi, stating that Solana has a better roadmap, team, and approach for L1 DeFi. This support emphasizes Solana’s monolithic approach, which is increasingly being accepted against Ethereum’s modular design. Solana continues to optimize its basic layer for speed, efficiency, and low transaction costs, while Ethereum relies more on Layer 2 solutions for scalability.

The network is also addressing earlier complaints about its economic stability. Solana Labs CEO has announced that a complete slashing solution is coming later this year with a “correlated slashing” mechanism. This development aims to enhance the network's security and stability, further bolstering investor confidence. The next few weeks will be crucial in determining whether Solana can maintain its growth trajectory and challenge its past highs above $190. As it continues to strengthen its fundamentals and navigate important price levels, Solana's future looks promising. The high staking yield and robust network revenue have positioned Solana as a formidable competitor in the cryptocurrency market, with the potential to continue challenging Ethereum's dominance.