Key takeaways:
- Solana perpetual futures funding rates flipped negative, signaling excess demand for bearish positions.
- Rival networks like Base and Hyperliquid pose direct threats to Solana by aggressively capturing DEX market volume.
Solana's native token $SOL ($SOL) faced a 15% correction following a rejection at $98 on May 11. A retest of the $83 level on Tuesday was followed by negative futures funding rates, indicating increased demand for short $SOL positions.
While declining network activity contributed to the price drop, competition among rival blockchain networks has picked up.
$SOL perpetual futures annualized funding rate. Source: Laevitas
The $SOL perpetual futures funding rate stood at -3% on Tuesday, down considerably from the +8% on Saturday. During neutral market conditions, this indicator hovers near +9% to account for the cost of capital and exchange risk. Demand for bullish leverage has been largely absent since Saturday, when $SOL price slipped below $90.
Solana DEX activity has declined by 56% since January
Declining activity on Solana’s decentralized exchanges (DEXs) has reduced ecosystem revenue and demand for $SOL. This reduced appetite for decentralized applications (DApps) was not exclusive to Solana, but growing competition poses a major threat, as investors fear that demand for memecoins has faded for good.
Solana weekly DEX volumes, DApps revenue, USD. Source: DefiLlama
Solana DApp revenue stabilized near $20 million per week, down from an average of $35 million in January. This movement closely mirrors the network's DEX activity trend, which currently stands at $11 billion per week, compared to January's average of $25 billion. The 30-day DApp revenue leaders on Solana are Pump, Axiom Pro, Phantom, and Jupiter, which command a combined 65% market share.
Blockchain ranked by weekly DApps revenue market share. Source: DefiLlama
Solana remained the top blockchain for DApp revenue despite intensifying competition. Hyperliquid created a direct threat due to its dominance in perpetual contracts, offering a high-throughput solution with core trading features built directly into the consensus layer. Meanwhile, the Ethereum layer-2 network Base offered seamless integration into the Coinbase ecosystem.
In terms of total value locked (TVL), Solana secured second place with $5.9 billion, followed by BNB Chain at $5.5 billion and Base at $4.5 billion. DEX platforms and staking DApps like Jupiter, Kamino, Sanctum, and Raydium lead Solana's TVL. Still, no blockchain threatens Ethereum’s $43.2 billion TVL, which relies heavily on collateralized lending and liquid staking.
Potential spoofing activity on Solana network DApps
Solana’s footprint in the DApp industry cannot be understated, but the network’s low fees offer a perfect opportunity for maximal extractable value (MEV) botting and inflated activity.
Related: Goldman Sachs exits XRP, Solana ETF exposure in Q1 2026
X user lukecannon727 noted that 1,600 addresses were reportedly responsible for nearly 63% of volumes on PreStocks, a synthetic asset trading platform that runs on the Solana network. According to the analysis, those entities presented balanced trading activity, high execution frequency, and small net losses. These findings are highly consistent with arbitrage activity, but they could also indicate volume spoofing.
Recent weakness in $SOL prices can be partially attributed to the broader decline in DApp demand and increased competition, especially from Hyperliquid and Base. An eventual bull run seems highly dependent on a pickup in DEX activity, particularly in memecoin trading. But, at the same time, there is no indication that $SOL should retest the $78 level last seen in early April.
