Solana Surpasses Ethereum in Staking Market Capitalization With 64.86% Staked

Solana has recently surpassed Ethereum in staking market capitalization, marking a significant shift in the cryptocurrency landscape. This development has sparked discussions about the sustainability of Solana's growth and the security of its staking model. Solana's impressive staking yield has attracted investors seeking passive income, but concerns about its security mechanisms compared to Ethereum's established protocols have also emerged.

According to recent data, 64.86% of Solana’s total supply is staked, delivering an annual percentage yield (APY) of 8.31%. In contrast, Ethereum has only 28.18% of its supply staked, with an APY of 2.98%. This disparity highlights Solana’s growing appeal for investors seeking passive income through staking. Staking market capitalization is calculated by multiplying the total number of staked tokens by their current price. With SOL priced at $138.91, Solana has officially surpassed Ethereum in this metric.

However, Solana’s high staking ratio has sparked controversy. Critics argue that Solana’s lack of a slashing mechanism (or penalties for validator violations) undermines the economic security of its staking model. Ethereum, with its slashing mechanism, offers greater security despite its lower staking ratio. Crypto expert Dankrad Feist warned, “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.”

Recent moves by large investors, or "whales," have further fueled interest in Solana. On April 20, 2025, a whale unstaked 37,803 SOL (worth $5.26 million). Similarly, Galaxy Digital withdrew 606,000 SOL from exchanges over four days (April 15–19, 2025), concluding with 462,000 SOL. Additionally, on April 17, 2025, a newly created wallet withdrew approximately $5.15 million worth of SOL from the Binance exchange. In the same tone, Binance whales withdrew over 370,000 SOL tokens valued at $52.78 million. While some whales withdrew their SOL holdings, other large holders accumulated. Janover, a US-listed company, increased its Solana holdings to 163,651.7 SOL (worth $21.2 million) and partnered with Kraken exchange for staking on April 16, 2025. These actions signal diverging plays from institutional investors and whales as the Solana price fluctuates around key levels.

As of this writing, SOL was trading at $140.49, up 3.53% in the past 24 hours. Analysts highlight $129 as crucial support for the Solana price, with $144 presenting the key roadblock to overcome before Solana’s upside potential can be realized. Breaking above the aforementioned roadblock could propel SOL toward new highs. Conversely, dropping below the $129 support level could trigger increased selling pressure. Nevertheless, SOL has shown a remarkable recovery, with a 14.34% increase over the past week.

Another factor to consider is the ongoing development of the Solana ecosystem. Key innovations include the QUIC data transfer protocol, the combination of Proof-of-History (PoH) and Proof-of-Stake (PoS), and the diversification of validator clients. With these developments, Solana continues to enhance its performance and decentralization. Additionally, the launch of the Solang compiler, compatible with Ethereum’s Solidity, has attracted developers from the Ethereum ecosystem. The upcoming community conference, Solana Breakpoint, could provide further tailwinds for the SOL price.

Despite surpassing Ethereum in staking market capitalization, Solana faces significant challenges. Ethereum benefits from a more mature DeFi ecosystem, greater institutional trust, and enhanced security through its slashing mechanism. In contrast, Solana’s high staking ratio (65%) could limit liquidity within its DeFi ecosystem. This raises the question of whether Solana can strike a balance between staking and the growth of its decentralized applications. As Solana continues challenging Ethereum’s dominance, the crypto community remains divided. Is Solana’s rise a sustainable breakthrough, or just another wave of hype?

The cryptocurrency market is currently witnessing a pivotal moment as Solana’s staking surge poses both opportunities and challenges. While its impressive staking yield has drawn considerable interest, issues surrounding its security framework and liquidity remain concerns. As the crypto landscape evolves, only time will tell if Solana can maintain its momentum and provide sustainable growth amid its fierce rivalry with Ethereum.