Solana (SOL) stakers are increasingly withdrawing their deposits from staking platforms and protocols, accelerating a trend that coincides with the asset’s recent price drop to the $130 range.
The outflow of staked SOL is adding pressure to the market, as both individual investors and large-scale holders (whales) begin unstaking their coins. This shift raises concerns about Solana’s staking ecosystem, especially as key DeFi projects also see a decline in deposits and revenue.
Staking Outflows on the Rise Amid Market Uncertainty
In the past month, withdrawals from Solana’s staking pools have slightly outpaced deposits, signaling a shift in investor sentiment. During the most recent two-day epoch, approximately 964,566 SOL was unstaked from the simple staking pool, reducing Solana’s overall staking share to 64.65%, down from a previous peak above 69%.
The largest withdrawals are coming from whales holding between 100,000 and 250,000 SOL. While these large holders traditionally benefit from passive income through staking, their recent actions indicate growing concerns over SOL’s price stability.
Adding to market pressures, a major token unlock on March 1 is set to introduce an additional 11.2 million SOL into circulation, sourced from FTX’s creditor repayment plan. The influx of these tokens could further impact SOL’s price trajectory.
Unstaked SOL Reaches Exchanges, Increasing Selling Pressure
Some of the recently unstaked SOL has already been transferred to exchanges, raising concerns of increased sell-side pressure. A notable example is a whale unstaking 96,155 SOL ($13.49 million) and moving the assets to Binance.
- The whale originally staked SOL at around $101 per token a year ago.
- The current market liquidity for SOL on Binance is approximately $3.4 million within 2% market depth, meaning large orders could significantly impact price movements.
Related: Franklin Templeton Joins the Solana ETF Race, Potentially Integrating Staking Rewards
Amid these developments, SOL traded at $138.13, with 24-hour trading volumes remaining high at $11.6 billion. The recent price decline of over 50% from its recent peak also marked the largest liquidation event for SOL since 2023.
Despite these negative indicators, some technical analysts suggest SOL may be oversold, indicating a potential short-term price reversal.
Solana DeFi Protocols Experience Staking and Revenue Declines
The broader Solana ecosystem is also feeling the impact of declining staking participation, as leading protocols JitoSOL and Helius Labs report slower inflows.
- JitoSOL’s deposits and withdrawals remain balanced, but activity has slowed, and fee revenues have begun to decline.
- More stakers have shifted to Binance, which offers greater convenience and liquidity through its BNSOL token.
- BNSOL is currently trading at a slight premium of $143.40, though it remains less liquid and susceptible to slippage.
Meanwhile, Solana-based decentralized applications (dApps) that once generated strong revenue are seeing a slowdown.
- Platforms like Pump.fun, Raydium, and Orca, which recently ranked among the top earners in the crypto space, have now fallen back into the top 20 of fee producers.
- Meteora and Circle remain among the leading revenue-generating apps, while trading activity on Solana has increasingly shifted toward USDC as the primary asset for liquidity pairs.
The diminishing demand for SOL in the meme token market has also contributed to the asset’s recent downturn, with trading volumes declining in speculative sectors.
Solana at a Crossroads
While Solana remains one of the most active blockchain networks, the current decline in staking participation, token unlocks, and weakening demand from key DeFi applications pose challenges for its near-term price recovery.
With ongoing market volatility, the next few weeks will determine whether SOL finds new support levels or continues its downward trend.
