Important points:
- Solana perpetual futures funding rates turned negative, indicating excessive demand for bearish positions.
- Rival networks such as Base and Hyperliquid pose a direct threat to Solana by aggressively capturing DEX market volume.
Solana’s native token SOL (SOL) faced a 15% correction after being rejected at $98 on May 11th. After retesting the $83 level on Tuesday, the forward funding rate turned negative, indicating increased demand for short positions in SOL.
A decline in network activity contributed to the price drop, but competition among rival blockchain networks has intensified.
SOL Perpetual Futures Annualized Funding Rate. sauce: Lightness
SOL Perpetual Futures funding rate was -3% on Tuesday, down significantly from +8% on Saturday. In neutral market conditions, this indicator remains around +9%, taking into account the cost of capital and exchange rate risks. There has been little demand for bullish leverage since Saturday, when SOL price fell below $90.
Solana DEX activity has decreased by 56% since January
Reduced activity on Solana’s decentralized exchange (DEX) has reduced ecosystem revenue and demand for SOL. This decline in demand for decentralized applications (DApps) is not unique to Solana, but increased competition poses a major threat as investors worry that demand for meme coins has disappeared forever.
Solana weekly DEX volume, DApps revenue, USD. Source: Defilama
Solana DApp revenue stabilized at nearly $20 million per week, down from an average of $35 million in January. This move closely mirrors the network’s DEX activity trend, which currently stands at $11 billion per week, compared to an average of $25 billion in January. Solana’s 30-day DApp revenue leaders are Pump, Axiom Pro, Phantom, and Jupiter, which collectively account for 65% market share.
Blockchains are ranked by weekly DApps revenue market share. Source: Defilama
Despite increasing competition, Solana remained the top blockchain by DApp revenue. Hyperliquid created the following direct threats: Advantages of indefinite contractprovides a high-throughput solution with core trading functionality built directly into the consensus layer. Meanwhile, the Ethereum Layer 2 network Base provided 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 with $5.5 billion and Base with $4.5 billion. DEX platforms and staking DApps such as Jupiter, Kamino, Sanctum, and Raydium are leading Solana’s TVL. Still, no blockchain threatens Ethereum’s $43.2 billion TVL, which relies heavily on collateralized lending and liquidity staking.
Potential spoofing activity on Solana network DApps
While Solana’s footprint in the DApp industry cannot be underestimated, the network’s low fees provide great opportunities for Maximum Extractable Value (MEV) bots and inflated activities.
Related: Goldman Sachs ends XRP and Solana ETF exposure in Q1 2026
Source: X/Luke Cannon 727
X user lukecannon727 pointed out that 1,600 addresses reportedly account for nearly 63% of the volume on PreStocks, a synthetic asset trading platform that runs on the Solana network. According to our analysis, these companies showed balanced trading activity, high execution frequency, and small net losses. Although these findings are highly consistent with arbitrage activity, they may also indicate volume spoofing.
The recent slump in SOL prices can be partially attributed to a broader decline in DApp demand and increased competition, especially from Hyperliquid and Base. The eventual bull market appears to be highly dependent on a recovery in DEX activity, especially in memecoin trading. But at the same time, there is no indication that SOL needs to retest the $78 level last seen in early April.
